Benzinga | Dec 7, 2020 10:45PM EST

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