On Feb. 12 Alipay owner Ant Group, LSE-listed Mail.ru Group, mobile operator MegaFon, sovereign fund RDIF and Alisher Usmanov’s holding USM signed binding agreements to create a payments joint venture (PJV) and a financial services joint venture (FSJV).
The deals, which follow an October 2019 non-binding agreement, are still subject to “a number of conditions including third party approvals.” The parties expect to close it “in 2021.”
These JVs will “work together to offer digital payment solutions and financial services designed to help people save money while spending it across the realm of the burgeoning e-commerce sector in Russia,” stated Mail.ru Group, without providing further details.
The parties’ respective contributions in the JVs are described as follows:
- Mail.ru Group will be the largest shareholder in the PJV with a 40% stake. Its contribution in assets, valued at 4.5 billion rubles (some $61 million at the current exchange rate), consists of two payment systems owned by the group, Money.Mail.Ru and VK Pay.
- Mail.ru Group’s contribution into the FSJV will amount to 870 million rubles ($11.9 million) in cash in exchange for a 5.95% stake in the FSJV.
- USM’s contribution into the FSJV will include a 100% stake in insurance company Renaissance, a 100% stake in Round Bank, a 100% stake in InPlat, other assets and cash.
- Ant Group, RDIF and MegaFon will contribute cash, assets or a combination of cash and assets into the FSJV and PJV.
Mail.ru Group’s press release specifies that “upon completion, the Russian shareholders will own the majority stakes in both the PJV and FSJV.”
The involvement of Round Bank suggests the second JV could potentially offer banking services. Purchases on credit could thus be made available without any intervention from a third-party bank.
USM’s influence in the two JVs will be considerable, taking into account the fact that this holding company has significant shares of Mail.ru Group and MegaFon.
