SAN FRANCISCO • Uber has completed a deal to sell a significant stake of itself to SoftBank, a Japanese conglomerate, paving the way for the ride-hailing company to make sweeping governance changes and to go public by 2019.
Under the agreement on Sunday, a consortium of investors led by SoftBank will buy at least 14 per cent of Uber through a combination of new and existing stock, according to three people briefed on the process, who spoke on condition of anonymity.
SoftBank plans to buy about US$1 billion (S$1.36 billion) of fresh stock at Uber's current valuation of about US$68.5 billion, but the bulk of the deal will be purchasing existing Uber shares from investors.
SoftBank is to buy the existing Uber shares in a process called a tender offer, which takes at least a month to complete. During that process, a price will be set for the existing Uber shares.
If investors are reluctant to sell and SoftBank cannot hit its threshold of 14 per cent ownership of Uber, SoftBank can walk away from the deal.
"Upon closing, it will help fuel our investments in technology and our continued expansion at home and abroad, while strengthening our corporate governance," Uber said in a statement.
The agreement follows an Oct 3 Uber board meeting, in which directors voted to move forward with an investment from SoftBank. As part of the deal, Uber's board agreed to governance changes, including measures that reduce the influence that Mr Travis Kalanick, Uber's former chief executive, has at the firm. He still has a seat on the company's board.
SoftBank plans to buy the Uber shares along with other investors. SoftBank will gain two Uber board seats as part of the investment.