Yandex and Sberbank signed a binding agreement on the establishment of a joint venture (JV) on the basis of Yandex.Market. Partners will own equal shares in the company that will conduct Internet trading in Russia, Georgia, CIS countries and in the Baltic States. Earlier this year, Sberbank was in talks to establish a joint venture with Alibaba Group, but the parties, according to the Financial Times, failed to reach an agreement.
As follows from the official announcement of the companies, Yandex and Sberbank reached the final agreement on the creation of a joint venture based on Yandex.Market. They concluded the agreement on intentions on August 9. Earlier it was expected that the deal would be closed before the end of this year. However, as follows from the message, it will not be possible to obtain the necessary regulatory permits for this – the closing date has shifted to the first half of 2018. Under the terms of the agreement, Sberbank purchases newly issued Yandex.Market shares worth 30 billion rubles. (about $ 500 million).
At the time of the transaction, “without consideration of future synergies,” partners estimate the entire enterprise at 60 billion rubles.
“Yandex” and Sberbank will own equal shares in the company, with 10% of the shares will go to the formation of an optional fund to encourage employees.
The main task of “Yandex.Market” will be the creation of a retail Internet retail service for users. In Russia, Georgia, CIS countries and in the Baltic States, Yandex and Sberbank will be engaged in Internet trading only within the framework of Yandex.Market. Maxim Grishakov, the general director of the Market, will continue to lead the company, he will also join the board of directors of Yandex.Market together with three other representatives from Yandex and three representatives from Sberbank.
The joint venture will use the technologies and brand “Yandex” and will receive advertising and information support for the Internet company and Sberbank. Financing from the bank should help with the base for the development of the logistics infrastructure and reduce the risks for Yandex.
Today it also became known that Sberbank and Chinese Alibaba Group could not agree on the creation of a joint venture in the field of Internet trading. In January, Kommersant reported that Sberbank and Alibaba were also negotiating the creation of a joint venture in the field of Internet trading in the first half of 2017. The Russian side expected that Alibaba Group would introduce its existing cross-border business in Russia and the CIS, possibly in other countries. From Sberbank, which would have gained control in business, it would have required primarily financial investments.
According to Kommersant’s information, Sberbank opted for a joint venture with a Russian aggregator.
According to the financial statements of Yandex, the company’s revenue in the e-commerce segment for July-September of this year decreased by 12% compared to the third quarter of 2016, to 1.06 billion rubles, adjusted EBITDA fell 42% to 223 million rub.
Author: Roman Rozhkov
Article in Russian: Kommersant