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MegaFon buys Mail.ru for $740m

03 January 2017

Alisher Usmanov’s MegaFon to spend $740m cash on 63.8% stake in Usmanov’s Mail.ru

Read more: MegaFon Russia Usmanov Mail.ru VKontakte

Russian mobile operator MegaFon is to spend $740 million on a controlling 63.8% stake in the Mail.ru group, which provides internet services, including mapping and games.

Shareholders in MegaFon will meet to decide the deal, which also requires regulatory approval. on 20 January. However both companies are part of the empires of businessman Alisher Usmanov, whose Metalloinvest currently owns Mail.ru and who also controls London Stock Exchange-listed MegaFon.

If shareholders agree the deal, Metalloinvest’s USM Holdings subsidiary will sell shares in Mail.ru to MegaFon for $640 million plus a further $100 million after a year. The transaction will be in cash.

MegaFon and Mail.Ru would continue operating as separate entities, said the companies, but would focus on "areas of mutual strategic and economic benefits", adding: "Any agreements between the companies would be on an arms-length and fully commercial basis."

Sergey Soldatenkov, CEO of MegaFon, said the transaction "allows MegaFon to make the next step in realisation of its digital strategy". It "would be able to provide a premium and differentiated offering to its digital subscribers, creating value for the shareholders of both companies".

Boris Dobrodeev, CEO of the Mail.Ru group, said: "MegaFon is a natural partner for Mail.Ru in various areas and we look forward to working together."

The Mail.Ru group operates the three largest Russian language social networks, VKontakte (VK), Odnoklassniki (OK) and Moi Mir (My World), and Russia’s largest online games business, including such gaming titles as Warface, Armored Warfare, Skyforge and Perfect World.

Soldatenkov said: "As a shareholder in Mail.Ru group we will support the Mail.Ru team’s initiatives focused on further development of existing products and launch of new products."

Usmanov is variously described as the 37th or the 58th richest person in the world, and the second richest in the UK: he is a major shareholder in Arsenal FC.






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