MegaFon will buy a controlling stake in the Mail.Ru Group from Usmanov for $ 740 million

Today, MegaFon announced its intention to acquire 63.8% of the voting shares of Mail.Ru Group from the USM group of companies, founded by Alisher Usmanov. For the controlling stake, MegaFon will pay $ 640 million at the time of closing the transaction and another $ 100 million in a year.

In a press release, MegaFon explains the need for a deal by simplifying joint projects of companies and favorable conditions for active cooperation between telecom operators and Internet companies:
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The deal is aimed at obtaining significant synergistic effects for both companies, including expanding the range and ways of promoting MegaFon’s digital services, launching the VKmobile special offer for users of the VKontakte social network and other possible initiatives.

The CEO of MegaFon, Sergey Soldatenkov, and the CEO of Mail.Ru Group, Boris Dobrodeyev, identified specific examples of such cooperation: the creation and promotion of the VKmobile application based on the VKontakte social network, improved targeting and predictive analytics.

As MegaFon emphasizes, after the purchase, the communication operator’s team and Mail.Ru will continue to work independently, with preservation in both existing corporate cultures and management methods. Cooperation and agreements between companies will be concluded on market terms.

Now the board of directors of MegaFon is convening a meeting of shareholders to approve the purchase of 11.5 million Class A shares and 21.9 million ordinary shares of Mail.Ru Group Limited. To complete the purchase, you also need to get approval from the Federal Anti-Monopoly Service of Russia.

In October of this year , information appeared in the media about the creation of a virtual communication operator for VKontakte on the MegaFon infrastructure. Then it was reported that the services created by VKmobile can be free: you will have to pay for them with actions (view ads, join a group, etc.). In early November, it became known about the MegaFon negotiations on the possibility of cooperation and the purchase of the Mail.Ru Group package. The latter, at that time, denied that it was participating in the merger negotiations.

MegaFon is one of the largest mobile operators in the Russian Federation, a member of the so-called “Big Three”. The operator has 77.3 million subscribers. The assets of the acquired Mail.Ru Group include the Mail.Ru portal with the postal service and other services, the largest social networks of the Russian segment of the Internet, Vkontakte and Odnoklassniki, ICQ instant messaging and shares in various projects: Sape, Qiwi, AdRiver, etc. On the international market, Mail.Ru operates under the My.com brand. Both MegaFon and Mail.Ru Group are now controlled by entrepreneur Alisher Usmanov through USM Holdings structures.