Japanese conglomerate SoftBank has been diversifying through investment for several years and has ventured into sectors outside its core mobile technology business, completing deals with the likes of French robotics firm Aldebaran and Chinese e-commerce giant Alibaba.
As part of the deal, Uber's board agreed to carry out a set of sweeping governance changes, including measures that reduce the influence that Travis Kalanick, Uber's former chief executive, has at the company. "Upon closing, it will help fuel our investments in technology and our continued expansion at home and overseas, while strengthening our corporate governance", Uber said in a statement on Monday.
The deal, allowing the Japanese consortium and its investors to buy at least 14 percent of Uber through a mix of newly created and existing stocks, is likely to lead to an investment of 10 billion USA dollars.
Confirming the development, an Uber spokesperson said: "Shweta has been a great advocate for Uber and the development of ridesharing in India".
The transaction will be conducted through a tender-offer process and may take at least one month to be completed.
Kalanick stepped down in June after months of controversy within Uber. The firm will also suspend the lawsuit that it filed against Mr. Kalanick, and drop the suit upon completion of the tender offer.
A consortium of investors led by SoftBank and Dragoneer reportedly plan to invest $1 billion to $1.25 billion in Uber. SoftBank is a major investor in Ola and Grab, Uber's rivals in those regions. The deal is also tied to new governance rules that aim to distribute power more equally and bring more oversight to the company. These reforms, Bloomberg reports, are key to SoftBank investing in Uber. The investment could be worth up to $10 billion, two people familiar with the matter have said.
Softbank has yet made no comments on the deal.
In turn, Kalanick must receive majority board approval should he want to replace the board seats over which he has control, according to the source.
SoftBank plans to purchase the Uber shares along with other investors, including Dragoneer, an investment firm. SoftBank, a well-connected Japanese technology company, could help Uber strike deals with competitors in India or Southeast Asia.
Uber's use of software aimed at thwarting rivals like Lyft has also hurt its image, and could create further legal woes.
The deal gives early investors such as Benchmark, whose Uber stake is worth almost $9 billion, the opportunity to cash out a very lucrative investment.