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Japanese technology conglomerate SoftBank has reached a deal with Uber to invest billions in the ride-hailing giant.
Uber Technologies Inc confirmed the investment in a statement on Sunday, 12 November, without giving details.
But a person briefed on the deal told The Associated Press that SoftBank Group will buy about $1 billion worth of new Uber stock, then will offer to purchase shares from investors and Uber employees with the goal of reaching a 14 percent stake in the company.
Uber’s statement said it reached an agreement with a consortium led by SoftBank and Dragoneer Investment Group. The deal is a vote of confidence in the company's potential, and “will help fuel our investments in technology and our continued expansion at home and abroad, while strengthening our corporate governance,” the statement said.
SoftBank in Tokyo declined comment.
Such IPO deals generally take some time to be finalised, as they involve many people.
The long-awaited deal was made public in October, but was delayed by a corporate governance and legal dispute between investor Benchmark Capital and ousted CEO Travis Kalanick. Both sides ended their feud on Sunday, clearing the way for the SoftBank investment, the person said.
Benchmark agreed to suspend a lawsuit against Kalanick and drop it once Softbank gets through a one-month tender offer period that will start in about two weeks. Benchmark, a major Silicon Valley venture capital firm that was among Uber's early backers, alleged in the lawsuit that Kalanick covered up turmoil and legal threats at Uber.
The deal allows early investors such as Benchmark to sell at least some of their shares at a handsome profit. But there will likely be some wrangling over how much shares are worth in the coming weeks.
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