4 Sep 2019 11:38

Deal to form JV with Alibaba, MegaFon, Mail.ru Group might be closed in coming weeks - RDIF CEO

VLADIVOSTOK. Sept 4 (Interfax) - The deal to form a joint venture between the Russian Direct Investment Fund (RDIF), mobile provider MegaFon , Mail.ru Group and China's Alibaba Group will be closed in the next few weeks, RDIF CEO Kirill Dmitriev said.

"Soon, all issues have essentially been finalized and purely technical issues [remain]. In other words, [the deal will be closed] in the coming, I'd even say weeks," Dmitriev told reporters on the sidelines of the Eastern Economic Forum.

The parties signed a binding agreement to form a joint venture in Russia and the CIS called AliExpress Russia. Under the terms of the deal, the RDIF, Alibaba Group and Mail.ru Group will together invest about $382 million in the venture, without taking into account the exercising of RDIF's option to buy additional shares in the company.

Alibaba Group will invest $100 million in the venture and contribute its AliExpress business in Russia; Mail.ru Group will invest $182 million and its e-commerce business Pandao; and the RDIF will invest $100 million.

MegaFon will sell a 9.97% economic interest in Mail.ru Group to Alibaba in exchange for a 24.3% economic stake in the joint venture.

Upon closing of the deal, Alibaba Group will have a 55.7% stake in AliExpress Russia, MegaFon will own 24.3%, Mail.ru Group will have 15% and the RDIF will hold 5%.

If it exercises its option, the RDIF could increase its stake in the venture to 12.9% by buying 7.9% from Alibaba Group. In future, the RDIF can sign an option agreement to buy up to 4% of shares in the venture from MegaFon.

The joint venture will be run by two co-CEOs, the head of AliExpress in Russia Liu Wei and Mail.ru Group first deputy CEO Dmitry Sergeyev.