The second largest mobile operator in Russia, MegaFon announced that it will acquire a majority stake of Russia’s biggest Internet group, Mail.Ru Group for $640 million. It includes $540 million to be settled when the deal is sealed and another $100 million to be paid one year later.
MegaFon will acquire 11.5 million Class A shares and 21.9 million ordinary shares of Mail.Ru Group, accounting for approximately 63.8% of the voting rights in Mail.Ru Group.
Mail.Ru Group owns Vkontakte (VK.com), the largest social media site in Russia with over 300 million accounts. It also operates two other major social networks, Odnoklassniki and Moi Mir, as well as a variety of sites, apps, games, and messaging services.
The transaction is aimed at achieving significant synergies for both companies, including enhancement of MegaFon’s digital offering and its distribution, launch of special VKmobile offering for users of VK social network, and other potential initiatives.
Following the proposed transaction, MegaFon and Mail.Ru would continue operating as separate entities.
Sergey Soldatenkov, CEO at MEgaFon
We are excited to announce an opportunity to acquire a controlling stake in Mail.Ru Group, a transaction which allows MegaFon to make the next step in realisation of its digital strategy. Closer ties with Mail.Ru Group will allow us to execute common strategic projects, including, but not limited to, the creation and promotion of special offerings to digital subscribers of VKmobile based on the social network VK, and improvements in clients targeting and segmentation.
Boris Dobrodeev, CEO at Mail.Ru Group
Potential co-operation in the execution of a number of common projects, such as the launch of the special VK branded offering and the use of predictive analytics technologies offers new useful products to our user base and new opportunities for our business.
