Mail.Ru instead of Yandex: German Gref is preparing a new Internet deal

What German Gref did not succeed with Yandex may succeed with Mail.Ru Group — according to Bloomberg, Sberbank is in talks to buy a 20% stake in Mail.Ru voting shares from Gazprombank. After unsuccessful negotiations on the purchase of a large stake in Yandex, the bank has already begun building a partnership with Mail.Ru - in the spring the companies created a joint venture, which included taxi and food delivery services, in which Sber is going to invest 50 billion rubles.

• According to Bloomberg, we are talking about the purchase of 20% of the voting shares of Mail.Ru Group. If so, we are talking about the entire package of Gazprombank in the IT holding. The bank owns 35% in MF Technologies, which controls 58.89% of the voting shares of Mail.Ru and 5.23% of the economic share in the group. Thus, Gazprombank indirectly controls 20.6% of Mail.Ru votes, or 1.83% of the economic share. According to Bloomberg’s calculations, based on the premium named by the agency’s source, the transaction amount will be about $170 million. This means that the premium will be small – when creating the joint venture in 2018, Gazprombank paid $157.5 million for the shares.
• In the event of a successful transaction, Sberbank will become the second largest shareholder of Mail.Ru Group in terms of voting share after MegaFon, which owns 26.5% of the votes through the same MF Technologies. Another 12.3% of the voting shares belong to the South African fund Naspers. The capitalization of Mail.Ru Group on the London Stock Exchange is approximately $4.6 billion.
• In response to questions from Bloomberg, Sberbank, Gazprombank, and Mail.Ru Group declined to comment.
• This spring, Sberbank became the largest partner of Mail.Ru Group — they agreed to create a joint venture, in which Mail.Ru will include Citymobil taxi services and Delivery Club food delivery services, and Sberbank will include the launched today Foodplex restaurant service . The partners plan to invest RUB 64 billion in the joint venture, RUB 50 billion of which will go to Sberbank. Sources of The Bell in the IT market compared the deal between Sberbank and Mail.Ru with an informal declaration of war on Yandex, with which German Gref had broken down by that time.
• Back in the fall of 2018, Sberbank considered Yandex as its potential strategic partner. In October 2018, The Bell was the first to write that the bank was interested in buying a large stake in Yandex - up to 30% of the capital. Negotiations on behalf of the bank were then led by German Gref's first deputy, Lev Khasis.
• On this news, the capitalization of Yandex collapsed by $ 2 billion a year ago, Sberbank then hastened to refute a possible deal, and the founder of Yandex, Arkady Volozh, announced that he was not going to sell his stake in the company. Later, the FT confirmed that Gref really hoped to make Yandex the basis for the Sberbank digital ecosystem, but Volozh turned down a possible deal. As a result, a conflict began between them: in July, the FT wrote that after the failure of negotiations, Gref never took part in meetings of the Yandex board of directors and did not vote on its decisions.
• The failure of the negotiations only exacerbated the disagreements over the joint project of Sberbank and Yandex in online trading, which at the start German Gref called the future “Russian Amazon”. In July, The Bell sources said that the parties were discussing divorce options, the FT reported a month later that the companies could agree on a redistribution of shares in the project, which was originally owned on a parity basis. So far, the status quo has been maintained, but the joint venture between Sberbank and Mail.Ru Group has become a severe blow for Yandex, which develops similar services - the search engine has fallen in price by $ 500 million on this news.

What do I get from this?

German Gref has been saying for many years that he intends to turn his bank into an IT giant following the example of Western corporations. This makes sense: IT corporations are attacking the traditional banking business everywhere. The second major acquisition after the acquisition of Rambler is likely to bring Sberbank closer to this goal. If all these deals help Gref and his team to build an ecosystem over time, for you and me it will mean an almost ubiquitous presence of Sberbank in the field of online services. Today alone, the bank has presented two news in this direction at once: about the launch of a restaurant service and foreign online transfers .