Russian mobile operator Megafon said it plans to acquire a 63.8 percent stake in the internet company Mail.ru Group. The stake is currently owned by companies belonging to the USM group. Both Megafon and Mail.ru Group are controlled by Russian businessman Alisher Usmanov through USM Holdings.
The acquisition remains subject to approval by an extraordinary general meeting (EGM) of shareholders on 20 January 2017. The company plans to acquire 11.5 million class A shares and 21.9 million ordinary shares in Mail.ru Group. The shares form around 63.8 percent of voting rights in the internet company.
The companies New Media and Technology Investment LP, New Media Technologies Capital Partners Limited and Ardoe Finance Limited plan to sell the shares for USD 640 million, which will be paid upon closure of the deal, and USD 100 million deferred for a year from the closure.
Megafon said that the acquisition will simplify and accelerate its ability to carry out joint projects. The deal is focused on generating significant synergy effects for both companies, including the expansion of Megafon's digital services and ways to promote them; the launch of the VKmobile service aimed at users of the social network VKontakte owned by Mail.ru; and other possible initiatives.
After closing the deal, the companies will continue working under market conditions, with management of both companies remaining independent. The deal needs clearance from federal competition regulator FAS, and depends on several factors independent of Megafon, the company added.
No fewer than 93 percent of Russian-speaking internet users access Mail.ru Group sites every month. Mail.ru Group owns a leading Russian e-mail service, as well as the major social networks VKontakte, Odnoklassniki and My World. The subscriber base of Megafon totals 77.3 million.
The company NMT, controlled by USM Holdings, owns a 15.2 percent stake and almost 64 percent of voting shares in Mail.ru Group. South Africa-based media holding Naspers holds 27.6 percent and Chinese firm Tencent owns 7.4 percent. Around 50 percent of the GDRs of Mail.ru Group are traded on the London Stock Exchange.
Mail.ru Group has announced that the cooperation with Megafon will focus on two sectors. The first is to offer mobile services to users of the social network VKontakte. Megafon will have the chance to use the VKontakte brand to launch a new VKMobile service, which will use the network and infrastructure of Megafon and its subsidiary, the LTE operator Scartel.
The second sector is big data analysis. The companies plan to share revenues on the basis of a mutually agreed commercial formula.
