Japanese multinational telecommunications and Internet corporation SoftBank Group has reached a multibillion-dollar deal with San Francisco based Uber Inc, it confirmed in a statement.
Although the details of the deal have not been yet disclosed, but as per the reports, the deal could be worth up to $10 billion of Uber’s stocks. It is also estimated that this deal would be a resolver of legal battles between Uber’s former CEO Travis Kalanick and prominent shareholders.
Venture capital firm Benchmark, an early investor with a board seat in the ride-services company, and Kalanick have reached an agreement over terms of the SoftBank investment.
“We’ve entered into an agreement with a consortium led by SoftBank and Dragoneer on a potential investment,” an Uber spokesman said. “We believe this agreement is a strong vote of confidence in Uber’s long-term potential.”
Uber is currently valued at $68.5 billion, but its stock will be sold to SoftBank at a lower price. The development raised will help it to invest further in strengthening its technology and geographic expansion. Under the deal, the initial public offering will take place before the end of 2019.
Although the deal was made public in October, yet it was delayed because of the legal dispute between its investor Benchmark Capital and Travis. The deal settled on Sunday, clearing the clouds of tension.
After the successful investment from SoftBank, Benchmark will drop the lawsuit entirely, and in return Kalanick would seek board’s approval when he seeks to replace any of the 3 board seats he holds, with the consent of the other board members. Kalanick has control over 3 board seats out of 11, two of which are occupied by Ursula Brown, the former Xerox Corp CEO, and former Merrill Lynch & CO Inc CEO John Thain. Travis appointed them in September without consulting the board members.
The deal would also allow investor Benchmark, who holds around $9 billion worth, to sell some of its shares at a handsome profit.