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Japanese Telecom Giant Acquires 18% of Uber

Japan SoftbankSoftBank has purchased 18 percent of Uber Technologies Inc. in what a report has described as a “major victory” for the ride-hailing company’s chief executive Dara Khosrowshahi.

Recode said a person who knows about the acquisition revealed that the transaction gives the Tokyo-based telecommunications company sizeable ownership of Uber, which is considered “the most valuable” American startup.

Recode reported that SoftBank would own 15 percent of Uber shares while the Japanese company’s co-investors would only get “under three percent” of Uber.

Richer Investors and Employees

The acquisition would also make an Uber’s early investors and employees richer, Recode added.

The Wall Street Journal (WSJ) first reported about SoftBank’s tender offer.

(Read: SoftBank Succeeds in Tender Offer for Large Stake in Uber)

WSJ’s sources said SoftBank bought a significant stake in Uber “at a steep discount to the company’s previous valuation.”

SoftBank had valued Uber at $48 billion – roughly 30 percent lower than its latest value of about $68 billion, the WSJ sources revealed.

A spokesperson for Uber said they “look forward to working with the purchasers to close the overall transaction, which we expect to support our technology investments, fuel our growth, and strengthen our corporate governance.”

$1B Investment

As part of the transaction, SoftBank will inject $1.25 billion in Uber, and the investment will be closed sometime next month.

Rajeev Misra of SoftBank, for his part, said they have “tremendous confidence” in Uber’s management and employees.

Misra also said SoftBank is “excited to support Uber as it continues to reinvent how people and goods are transported around the world.”

The acquisition of Uber comes amid troubles that have plagued the ride-hailing company, foremost of which was the hacking of its database in October last year, which Uber hid from the public and regulators.

(Read: Uber Paid Hackers to Delete Data on 57M People)

Also, a former employee of Uber accused the company of espionage, bribery, and hacking.

What’s Next?

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