SoftBank picks up majority stake in Uber

SoftBank picks up majority stake in Uber

According to the New York Times, the terms of the agreement include suspending and ultimately scrapping the lawsuit Benchmark filed against embattled former CEO Travis Kalanick.

Japanese multinational telecommunications and Internet firm SoftBank Group said in a statement that although it is considering investing into the ride-hailing company, Uber Technologies, there was "no final agreement".

The agreement follows an October 3 Uber board meeting, in which directors voted to move forward with an investment from SoftBank.

"Upon closing, it will help fuel our investments in technology and our continued expansion at home and overseas, while strengthening our corporate governance", he said. Then Kalanick threw a wrench in the deal, insisting that Benchmark put a hold on its lawsuit against him before he would approve it.

Now what we know is that SoftBank will buy at least 14% of Uber stakes. As well as boosting its investments in technology, Uber said it would strengthen its corporate governance.

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Meanwhile, SoftBank has been diversifying through investment for several years, and has ventured into sectors outside its core mobile technology business - completing deals with the likes of French robotics firm Aldebaran and e-commerce with Chinese giant Alibaba (Berlin: AHLA.BE - news).

SoftBank, along with Dragoneer and General Atlantic, are expected to invest at least $1 billion in Uber and purchase up to $9 billion worth of Uber shares from existing investors.

Under the agreement, SoftBank will buy 1 billion dollars in new stocks valued at Uber's current valuation of 68.5 billion dollars, but the Softbank consortium will build the majority of its stake in the ride-service company by purchasing Uber's current shares from investors to reach the 14 percent mark. A source with knowledge of the matter said that the deal comes with a resolution to have an initial public offering by 2019. During that process, a price will be set for the existing Uber shares. "By no means is our investment decided", he said in a statement on Monday.

Softbank has yet made no comments on the deal. Early employees also stand to sell for significant sums. Then SoftBank will propose a price at which it will buy stock. If SoftBank doesn't get enough buyers, it could propose a higher price or walk away.

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