Chinese e-commerce giant Alibaba Group has agreed to found a joint venture with the Russian Direct Investment Fund (RDIF), Russian mobile operator Megafon and internet company Mail.ru Group. The deal agreed at Russia’s Eastern Economic Forum will see Alibaba own 48 percent of the new company AliExpress Russia, while the three Russian entities will have a combined 52 percent stake in the e-commerce platform after contributing cash, shares and other assets.
Alibaba will fold its AliExpress Russia business into the new joint venture, including its Russia-based domestic and cross-border operations, as well as inject cash into the JV along with other resources to support the business.
Megafon will swap its 10 percent stake in Mail.ru with Alibaba for a 24 percent stake in AliExpress Russia. RDIF will acquire a 13 percent stake in AliExpress Russia after investing new capital in the company and buying shares from Alibaba.
Mail.ru will contribute its Pandao e-commerce business and cash in exchange for a 15 percent stake in AliExpress Russia. The new venture is expected to benefit from Mail.ru's extensive social media and internet presence in Russia, which counts over 100 million users for platforms such as Vkontakte and Odnokklassniki.
AliExpress Russia and Mail.Ru Group plans to partner on other initiatives, such as traffic and products, which will come under a strategic agreement. The JV is also planning to broaden its scope by investing in other business together with Mail.Ru Group, including foodtech and other initiatives.
The transaction is expected to close in the first quarter of 2019.
