RDIF, MegaFon, Mail.ru, Alibaba close deal on AliExpress Russia JV
MOSCOW, Oct 9 (PRIME) -- The Russian Direct Investment Fund (RDIF), mobile operator MegaFon, Internet company Mail.ru Group, and Chinese e-commerce giant Alibaba Group have closed a joint venture deal to integrate Russia’s key consumer and Internet platforms, Mail.ru Group said on Wednesday in a statement.
“Alibaba remains focused on fulfilling our mission ‘to make it easy to do business anywhere’. The AliExpress Russia JV is an important part of Alibaba’s globalization strategy, and a key step toward our long-term goal to help 10 million small businesses reach profitability and serve 2 billion customers worldwide,” said Executive Chairman and CEO of Alibaba Group Daniel Zhang.
“Together with Mail.ru Group, the RDIF and MegaFon, we are committed to accelerating development of the digital consumer economy of Russia and CIS countries by enabling regional brands and small and medium-sized enterprises (SMEs) to reach and serve their target consumers through our unique and innovative shopping experience.”
As it was earlier announced, Alibaba Group invested U.S. $100 million and contributed AliExpress Russia to the joint venture. MegaFon sold its 9.97% economic stake in Mail.ru Group to Alibaba Group in exchange for a 24.3% stake in the AliExpress Russia JV.
Mail.ru Group contributed its Pandao e-commerce business and cash investments of $182 million in exchange for a 15% stake in the AliExpress Russia JV. The RDIF invested $100 million into the AliExpress Russia JV and may further acquire additional shares of the joint venture from Alibaba Group for $194 million
As of the deal’s closure, Alibaba Group owns 55.7% of economic rights and 49.9% of voting rights in the joint venture; MegaFon owns 24.3% and 30.2%; Mail.Ru Group has 15% and 18.7%; and the RDIF has 5% and 1.2% respectively.
With the RDIF’s call option exercised, Alibaba Group will own 47.8% of economic rights and 47.6% of voting rights; MegaFon will have 24.3% and 26.4%; Mail.ru Group will own 15% and 16.3% and the RDIF will have 12.9% and 9.6% respectively.
The joint venture is majority owned by Russian shareholders with a board of directors comprised of representation from the RDIF, Alibaba Group, MegaFon and Mail.ru Group. Boris Dobrodeyev will be the Chairman of AliExpress Russia JV Board of Directors. The parties appointed two Co-CEOs: AliExpress Russia Head Liu Wei and First Deputy Chief Executive Officer of Mail.ru Group Dmitry Sergeyev.
As part of the shareholder collaboration, the AliExpress Russia JV and Mail.ru Group entered into a strategic cooperation agreement relating to, among other things, user traffic and product initiatives. The AliExpress Russia JV will be featured on Mail.ru Group’s platforms through exclusive product integration and marketing solutions.