The new business will be based on Alibaba's e-commerce business AliExpress in the country and the Mail.ru Group platform and operate under the name AliExpress Russia. The joint venture's board will include representatives of Megafon, Mail.ru group, Alibaba Group and RFPI. Two CEOs will manage the company, one nominated by Alibaba Group and the other by Mail.ru Group.
Alibaba Group will invest USD 100 million in the new company as part of converting its Ali Express business in Russia into a part of the new joint venture. Alibaba Group will own 49.9 percent of voting shares and a 55.7 percent equity stake at the initial stage. These will change to 47.6 percent and 47.8 percent, respectively, after the acquisition of an additional share option by RFPI.
Megafon will exchange with Alibaba Group a 9.97 percent stake in Mail.ru Group for a 24.3 percent stake in the joint venture, and the operator will own 30.2 percent of voting rights in the initial stage. The amount of voting shares will reduce to 26.4 percent after the acquisition of an additional share option by RFPI.
Mail.ru group will transfer USD 182 million and its electronic commerce business Pandao in Russia to the new joint venture. The company will own a 15 percent stake in the joint venture and hold 18.7 percent of voting rights. The amount of voting shares will reduce to 16.3 percent after the additional share option by RFPI.
RFPI will invest USD 100 million in the joint venture and will be able to acquire a stake in the new company for USD 194 million. After the acquisition of the share option, RFPI will own a 12.9 percent stake and 9.6 percent of voting shares in the company.
