425: VEON's Kyivstar Acquires Uklon, Ukraine's Leading Ride-Hailing Business, for $155.2 Million

Kyivstar, a subsidiary of VEON, is set to acquire Uklon, a top Ukrainian ride-hailing and delivery platform, for $155.2 million, marking Kyivstar's expansion into digital consumer services.

Summary

• VEON's Kyivstar has signed an agreement to acquire Uklon for $155.2 million.
• The acquisition will give Kyivstar 97% ownership of Uklon.
• Uklon is a leading ride-hailing and delivery platform in Ukraine, operating in 27 cities with over 100,000 driver-partners.
• In 2024, Uklon facilitated over 100 million rides and 3 million deliveries.
• Uklon also expanded into Uzbekistan in 2023, where VEON's Beeline Uzbekistan operates.
• The deal is subject to customary closing conditions and approvals.
• Kyivstar's investment is seen as a statement of confidence in Ukraine's digital growth potential.
• The acquisition aligns with VEON's digital operator strategy.
• The transaction is expected to close in the third quarter of 2025.
• VEON has committed to invest $1 billion in Ukraine's digital infrastructure between 2023 and 2027.

Sentiment

Score: 8

Explanation: The announcement is positive, highlighting strategic expansion and investment in a growing market. The deal is expected to close, and management expresses confidence in future growth.

Positives

• Kyivstar expands its digital services portfolio by acquiring a leading ride-hailing and delivery platform.
• Uklon's CEO will remain in his position to continue developing the company's products and services.
• The acquisition is a strategic investment in Ukraine's digital economy.
• Uklon will have more opportunities and expertise to further improve its service with the support of Kyivstar.
• VEON's digital products serve 120 million monthly active users in 5 countries.

Risks

• The agreement is subject to customary closing conditions and approvals, which may not be met.
• The transaction is subject to the approval of Cohen Circles shareholders and other customary closing conditions.
• The deal could be terminated if certain events occur.
• The business combination agreement between VEON and Cohen Circle Acquisition Corp. I could be terminated.
• The transaction approval by the Antimonopoly Committee of Ukraine could be withdrawn.
• Legal proceedings could be instituted against Kyivstar, VEON, or Uklon.
• Changes to the proposed structure of the acquisition may be required.
• The acquisition could disrupt current plans and operations of VEON or Kyivstar.
• The anticipated benefits of the acquisition may not be realized due to competition or other factors.
• Uklon may be unable to retain its management and key employees.
• Changes in applicable laws or regulations or required regulatory approvals could impact the deal.
• The escalation or de-escalation of war in Ukraine could impact the deal.

Future Outlook

VEON anticipates expanding Uklon's capabilities beyond Ukraine and Uzbekistan with the support of its digital operators in Kazakhstan, Pakistan, and Bangladesh. The company expects the transaction to close in the third quarter of 2025.

Management Comments

• Kaan Terzioglu, CEO of VEON Group and Chairman of Kyivstar Supervisory Board, stated that they are looking forward to exploring the expansion of Uklon's capabilities beyond Ukraine and Uzbekistan.
• Oleksandr Komarov, CEO of Kyivstar, said that they are happy to bring together two market-leading companies with strong value propositions.
• Dmytro Dubrovsky, co-founder of Uklon, expressed confidence that Uklon will have more opportunities and expertise to further improve its service with the support of Kyivstar.

Industry Context

This acquisition reflects a trend of telecom operators expanding into digital services to diversify revenue streams and offer more comprehensive solutions to customers. Ride-hailing and delivery services are increasingly integrated into digital ecosystems.

Comparison to Industry Standards

• The acquisition of Uklon by Kyivstar is similar to moves by other telecom companies globally to diversify into adjacent digital services.
• For example, in Southeast Asia, Grab started as a ride-hailing service and expanded into food delivery, digital payments, and financial services.
• Similarly, Gojek in Indonesia evolved from ride-hailing to a super app offering various services.
• The $155.2 million valuation for Uklon reflects the growth potential of the ride-hailing and delivery market in Ukraine and the broader region.

Stakeholder Impact

• Shareholders of VEON may benefit from the expanded digital services portfolio and potential revenue growth.
• Uklon's employees may have new opportunities for growth and development within Kyivstar.
• Customers of Kyivstar and Uklon may benefit from integrated services and enhanced digital experiences.
• Driver-partners on the Uklon platform may see increased demand and earning potential.
• The acquisition could stimulate further investment in Ukraine's digital economy.

Next Steps

• Obtain customary closing conditions and approvals.
• Secure approval from Cohen Circles shareholders.
• Close the transaction, expected in the third quarter of 2025.
• Integrate Uklon into Kyivstar's digital services portfolio.
• Explore expansion of Uklon's capabilities beyond Ukraine and Uzbekistan.

Key Dates

Keywords

Kyivstar, Uklon, VEON, acquisition, ride-hailing, delivery, digital services, Ukraine, investment