Russia's Federal Antimonopoly Service (FAS) blocked the acquisition of Vezet taxi operator by Yandex.Taxi, the joint venture of Yandex internet major and Uber Technologies. Previously Yandex.Taxi put the deal on hold amid the coronavirus (COVID-19) epidemic, but reportedly renewed the bid on May 15 and was refused.

As reported by bne IntelliNews, Yandex snapped up Vezet from its rival Mail.ru in 2019, in a major deal that included 3.6% equity and $71.5mn in cash. With a market share of about 12% Vezet was seen as significantly strengthening Yandex.Taxi's position, especially in the regions.

But the negative FAS ruling claims that the deal would negatively influence the competitiveness in the Russian taxi ordering market. The watchdog estimates that the combined market share would reach 70%, and top 80% in nineteen Russian regions.

The estimates are much higher than previously calculated by independent analysts that saw Yandex.Taxi's market share at 27% and Vezet being second-largest operator with 12%.

Vezet was established in 2017 by uniting the Fasten Russia, Saturn, Red Taxi, RuTaxi, Lider and Vezet operators. The company works in over 100 cities in Russia, Kazakhstan and the Czech Republic, processing over 1mn orders a day.

Kommersant daily reported that another taxi player Gett had urged the FAS to block the deal. It was reported previously that Gett could team up with the joint venture between Mail.ru Group and Russia's largest bank Sberbank, the main competitor of Yandex in the transportation field.

BCS Global Markets analysts argued to Kommersant that while initially the Vezet deal was seen as promising for Yandex, in the post-coronavirus market Yandex.Taxi retains strong potential for organic growth even without acquisitions.

Other analysts and think-tanks told the daily that FAS call on the deal was well-informed and should be viewed as a benchmark decision. It follows the global trend of limiting the market shares of digital and other corporations.