Page 107 - RusRPTJul19

company gets exposure to the leading e-commerce platform in Russia. Alibaba is to contribute its Russian operations and USD 100mn. Initially it will get a 55.7% economic interest and a 49.9% voting stake. Mail.ru will contribute its e-commerce service Pandao and USD 182mn to get a 15% economic and 18.7% voting stake. MegaFon is going to transfer a 9.97% economic stake in Mail.ru to Alibaba for a 24.3% economic and 30.2% voting stake. RDIF will pay USD 100mn for a 5% economic and 1.2% voting stake. It is also going to have the option to acquire a 7.9% economic interest from Alibaba for USD 194mn and enter into an option deal to buy up to 4% of the JV’s common equity from MegaFon. Based on the initial cash contribution of RDIF, we estimate that the JV is valued at USD 2bn. This implies that MegaFon’s stake in Mail.ru was valued close to the current market price.
Yango, a digital e-hailing app currently operating in 16 countries across Europe, the Middle East and Africa, was launched in the Romanian capital Bucharest on June 27, according to See News. Romania is the fifth EU country where the service is available, after the Baltic trio of states: Estonia, Latvia, Lithuania, and Finland. Yango is part of Yandex Group, one of the largest IT companies in Europe, also known as “the Google of Russia”. The company says that the new service offers affordable rides and quality services. Rides ordered through the app start at the discounted price of $1.20, which includes the car reservation, a 3 km distance and a duration of 7 minutes. Yango customers will be able to go from Otopeni Airport to the center of Bucharest (University Square) for about $8.5. Payment is currently only available through an in-app bank card.
Russia's leading retailer X5 Group and Santens Service Group will set up an online pharmaceutical marketplace on the basis of Perekrestok.ru online store, the companies announced. The online store apteka.perekrestok.ru will allow the customers to collect orders at about 1,400 newly-opened pharmacy pick-up points in X5’s stores. X5 has already arrangements to open 1,400 pharmacy pick-up points. In the partnership, Santens will take care of the supply chain. "The project’s logistics will be fully provided by Santens, so X5 does not have to invest in supply chain logistics, while from the other hand in future the project may help in raising traffic in the stores by pick-up points network," BCS Global Markets commented on June 20, seeing the news as neutral for X5 shares. BCS GM has a Buy recommendation on X5 with a target price of $37 implying an upside of 15%. Last month X5 continued to expand its online retail capabilities, teaming up with Courier Service Express (KSE) to deliver online orders to X5 stores Pyaterochka, Perekrestok, and Karusel, as well as door-to-door grocery deliveries. Previously in February 2019 X5 announced plans to develop a parcel lockers network via a joint venture with Pickpoint, Russia's largest operator of parcel lockers and pick-up points. X5 is in intense rivalry with its largest competitor Magnit and smaller retailers. As Russian supermarket chains are running up against the limits to growth, X5 has stepped up its investments in online retailing solutions. Magnit has also invested in (physical) pharmacy assets, in 2018 finalising the acquisition of 100% of pharmaceutical wholesaler and distributor SIA Group, but the move was unpopular with analysts.
Mail.ru in car-sharing partnership with Nissan and VEB-leasing. Mail.ru's 70% subsidiary signed agreement with Nissan and VEB-leasing to jointly develop urban infrastructure services in Russia, starting with car-sharing – Vedomosti. As part of the agreement, VEB-leasing acquired 250 Nissan Qashqais, and could increase the number to 10,000 within a year (close to
107 RUSSIA Country Report July 2019 www.intellinews.com