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Uber To Offload Self-Driving Unit To Amazon-Backed Startup Aurora

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Uber To Offload Self-Driving Unit To Amazon-Backed Startup Aurora

Uber Technologies Inc (NYSE: UBER) has finalized a deal to offload its self-driving unit Uber Advanced Technologies Group to Aurora Innovation.

What Happened: The combined company created by the merger of the two autonomous driving businesses is valued at close to $10 billion, according to TechCrunch. Instead of receiving a cash consideration for Uber ATG, the ride-sharing company will invest an additional $400 million in Aurora for a stake in the new company, the two companies revealed in a filing with the U.S. Securities and Exchange Commission.

Uber will individually hold 26% in Aurora, following the transaction. The aggregate stake of Uber, the Uber ATG investors, and employees on a fully diluted basis is estimated close to 40%.

Dara Khosrowshahi, CEO of Uber, will be appointed as a director on Aurora’s board.

Why Does It Matter: Reports of Uber's plans to shed its self-driving business surfaced in mid-November when the ATG unit was valued close to $7.5 billion.

Aurora Innovation is backed by investors like venture capital firm Sequoia Capital, T. Rowe Price Group Inc. (NASDAQ: TROW), and Amazon Inc (NASDAQ: AMZN). Uber is backed by the Japanese conglomerate, SoftBank Group’s (OTC: SFTBF) Vision Fund, and Toyota Motor Corporation (NYSE: TM).

With the merger deal in place, Aurora will gain access to Uber’s ride-sharing platform and its vast client base.

Price Action: UBER closed 1.93% lower on Monday at $53.80.

Photo by Dllu on Wikimedia

 

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