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Soft Bank Group Acquires 15% Stake In Uber

Soft Bank

On December 28, 2017 (Thursday), Softbank Group acquired 15% stake in Uber. According to the deal terms, SoftBank Group will also purchase $1 billion worth of shares of Uber.

Soft Bank

soft-bank

SoftBank Group is a Japanese multinational organization.

The company’s businesses include:  

  • Telecommunications
  • Broadband
  • Technology services
  • e-commerce
  • Media
  • Finance
  • Semiconductor designing

The headquarters of the company is situated in Tokyo, Japan.

SoftBank Group is a technology major, involved in the process of acquisition of companies for many years now. SoftBank Group stands as the third biggest public sector company in Japan, next to Toyota and Mitsubishi.

Uber

uber

Uber is a company that creates, markets and operates its own mobile apps for its car transportation and food delivery businesses. The company operates its taxis in 633 cities, globally. Uber is headquartered in San Francisco.

Uber’s mobile app software can be used only by drivers with smartphones. Users of Uber’s services can get access either through their smartphone or the mobile website. Drivers in Uber can rent a car from the company or use their own car

Softbank’s Business Deal of Acquiring 15% Stake in Uber

business-deal

Official sources from SoftBank Group reported that the company will complete its entire investment by January 2018. SoftBank Group will pay $48 billion to Uber for acquiring that 15% stake.

Uber’s benefit from this deal with Softbank Group where:

  • Firstly, the inhibitions for Uber in selling its stock to the public will be cleared.
  • Secondly, Uber has gained confidence and is contemplating to launch its IPO (initial public offering) in 2019
  • Thirdly, Uber’s top management officials mentioned that after entire completion of the deal, the transaction will facilitate:
    • Enhancing the company’s technology-based investments
    • Escalating the business growth of the company
    • Reinforcing the company’s corporate governance
  • Next, Softbank and its co-investors will also give $1.25 billion to Uber as new investment. It forms part of the acquisition transaction
  • Uber could strike more partnership deals with companies across Asia, due to this acquisition deal
  • Finally, the power battle happening between Uber’s former CEO, Travis Kalanick and Benchmark, the company’s largest investor will pacify, hereon.

Important Related Information

Major shareholders of Uber, Benchmark and Menlo Ventures had agreed last month to sell their stake in the company. However, Uber’s stock value will become undervalued by 30% due to this deal. During 2016, Uber’s corporate value was nearly $70 billion.

Soft Bank Group has been on an acquisition spree for many years now. The end result of this acquisition will further intensify its huge global repute.

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