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Business Combinations
9 Months Ended
Sep. 30, 2021
Business Combination and Asset Acquisition [Abstract]  
Business Combinations
Note 16 – Business Combinations
Careem
During the first quarter of 2020, we completed the acquisition of substantially all of the assets of Careem for approximately $3.0 billion. Dubai-based Careem provides primarily ridesharing and to a lesser extent meal delivery, and payments services to millions of users in cities across the Middle East, North Africa, and Pakistan. On September 21, 2021, ownership of Careem’s operations in Morocco were fully transferred to us. As of September 30, 2021, ownership of Careem’s operations in Qatar had not yet been transferred to us; however the results of operations and net assets were fully consolidated as variable interest entity.
As part of the acquisition, we agreed to issue the Careem Notes with an acquisition date fair value of $1.6 billion in different tranches with $880 million of the principal amount of the Careem Notes issued as of January 2, 2020 and settled in cash on April 1, 2020. Each tranche of the Careem Notes is due and payable 90 days once issued. The holders of the Careem Notes may elect to convert the full outstanding principal balance to common stock at a conversion price of $55 per share of Uber Technologies, Inc. at any time prior to maturity. During the three months ended September 30, 2021, none of the holders of the Careem Notes elected to convert their notes. During the nine months ended September 30, 2021, certain holders of the Careem Notes elected to convert their notes and as a result of such elections, $427 million of the principal amount of the Careem Notes matured, of which $195 million were settled in cash and $232 million were settled in equity.
The remaining amount of the Careem Notes is recognized as a commitment to issue unsecured convertible notes at fair value in accrued and other current liabilities of $115 million and in other long-term liabilities $122 million as of September 30, 2021. The discount from the Careem Notes face value to fair value will be accreted through the respective repayment dates as interest expense. The amount of accretion for the three and nine months ended September 30, 2021 was not material.
Cornershop
During the third quarter of 2020, we acquired a 55% controlling interest in the Cornershop Global (“CS-Global”), an entity which held all of Cornershop Cayman’s (“Cornershop”) business operations, except for those in Mexico. Cornershop operates as an online grocery delivery platform primarily in Chile and Mexico. Uber and CS-Global also entered into a put/call arrangement over the non-controlling interest in CS-Global, providing Uber the right and obligation to acquire the remaining interest from non-controlling interest holders, exercisable in 5 years if there is no IPO or liquidation event, at a future negotiated price.
Concurrent with the CS-Global acquisition transaction, Uber, Cornershop and CS-Global entered into a put/call agreement providing CS-Global with the right through the call option (and obligation through the put option held by Cornershop) to purchase all of the interests in CS-Mexico, contingent upon the receipt of regulatory approval in Mexico (“CS-Mexico Put/Call”). Upon either the exercise of the call option (by CS-Global) or the put option (by Cornershop), CS-Global would acquire 100% of the outstanding equity interests in CS-Mexico.
In December 2020, we received approval from Mexico’s antitrust regulator to complete the CS-Mexico transaction. On January 11, 2021, CS-Global exercised the call option through the CS-Mexico Put/Call agreement and acquired 100% of the outstanding equity interest in CS-Mexico, and we owned 55% of CS-Mexico through our ownership in CS-Global. The acquisition of CS-Mexico was accounted for as a business combination. The acquisition date fair value of the consideration transferred for CS-Mexico was immaterial, and consisted of a combination of cash payment and equity payment in Uber common stock and the fair value of the CS-Mexico Put/Call remeasured at the acquisition date. As a result of remeasuring our prior CS-Mexico Put/Call held immediately prior to the business combination, we recognized an immaterial loss during the nine months ended September 30, 2021. The loss was included in other income (expense), net in the condensed consolidated statements of operations.
In August 2021, we completed the acquisition of the remaining 45% ownership interest in Cornershop (or 47%, on a fully-diluted basis) in an all-stock transaction. As consideration for our acquisition of the remaining non-controlling interest, we issued 25 million shares of our common stock, including 4.6 million restricted shares issued to certain Cornershop employees. In addition, we issued 4 million stock options to replace assumed outstanding stock options. These replacement stock options attributable to post-acquisition service are included in our option activity and will be recognized as stock-based compensation expense.
The acquisition was accounted for as an equity transaction, as we previously controlled and consolidated Cornershop. Accordingly, we did not recognize a gain or loss in our condensed consolidated statements of operations during the three months ended September 30, 2021. In connection with this acquisition, the previously recognized non-controlling interest was derecognized. Following this transaction, Cornershop became our wholly-owned subsidiary.
The total purchase price was determined to be $967 million, based on the number of shares issued and Uber’s share price on the closing date. The fair value of the 4.6 million restricted shares issued to certain Cornershop employees was determined to be $202 million. These shares are restricted and contingent on the employees’ continuing employment at the combined company for the next three years. These restricted shares are considered compensation for post-combination services and will be recognized as stock-based compensation expense ratably over the next three years.
Postmates
On December 1, 2020, we completed the acquisition of Postmates, Inc. (“Postmates”), an on-demand delivery platform in the U.S. by acquiring 100% ownership interest in Postmates for a total consideration of approximately $3.9 billion. During the first quarter of 2021, we recorded a measurement period adjustment of $170 million to accrued and other current liabilities with a corresponding increase to goodwill, based on facts and circumstances in existence as of the effective date of the acquisition. Refer to Note 13 – Commitments and Contingencies for further information.