Russian mobile operator Megafon, the internet company Mail.ru Group, global e-commerce company Alibaba Group and Russian Direct Investment Fund (RDIF) have received approval from federal competition regulator FAS to integrate Russia’s key consumer internet and electronic commerce platforms and launch a social commerce joint venture in Russia and the CIS.
The parties agreed to establish the AliExpress Russia joint venture on the basis of the existing electronic commerce business of AliExpress Russia and the Mail.ru Group's social and digital businesses. The parties have been working closely towards definitive agreements relating to the AliExpress Russia JV, based on the principles set forth in the Framework Agreement signed in Vladivostok by all shareholders in September 2018.
The AliExpress Russia JV will be majority-owned by Russian shareholders, overseen by a board of directors with representation from RDIF, Alibaba, MegaFon and Mail.ru Group, and managed by two co-CEOs, one of whom will be nominated by Alibaba Group and the other by Mail.ru Group.
As part of the shareholder collaboration, the AliExpress Russia JV and Mail.ru Group will enter a cooperation agreement relating among other things to traffic and product initiatives. As part of the cooperation, the AliExpress Russia JV will promote its services on Mail.ru Group's platforms through exclusive product integration and marketing.
Each shareholder has agreed to make certain contributions to the AliExpress Russia JV. Alibaba Group will invest USD 100 million and contribute AliExpress Russia to the venture. This consists of Alibaba Group's current Russia-based domestic and cross-border operations of the global retail marketplace business of AliExpress.
Megafon will sell its 9.97 percent economic stake in Mail.ru Group to Alibaba Group in exchange for a 24.3 percent stake in the AliExpress Russia JV with 30.2 percent voting rights.
Mail.ru Group will contribute its Pandao electronic commerce business and cash investments of USD 182 million in exchange for a 15 percent stake in the AliExpress Russia JV with 18.7 percent voting rights.
RDIF will invest USD 100 million into the AliExpress Russia JV and may acquire more shares in the joint venture from Alibaba Group for USD 194 million. Upon exercising the option to purchase more shares in the venture, RDIF would own economic and voting stakes in the joint venture of 12.9 percent and 9.6 percent respectively.
