UPDATE: Sberbank, Mail.Ru to set up JV on Delivery Club, Citymobil base

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MOSCOW, Jul 25 (PRIME) -- Russian biggest lender Sberbank and internet company Mail.Ru Group have signed an agreement of intent to set up a joint venture focusing on transportation and food on the base of Delivery Club and taxi aggregator Citymobil, the companies said in a statement Thursday.

Sberbank and Mail.Ru Group will invest up to 64 billion rubles in the joint venture, to be hold on a parity basis, on the condition that key performance indicators are achieved over the 12-month period following the closing of the deal.

The companies plan to sign a legally binding agreement on the deal in September–November after approval is received from corporate governance bodies, antimonopoly authorities and other regulators.

Mail.Ru Group will contribute to the joint venture its stakes in Delivery Club (100%) and Citymobil (22.69%), the related minority investments and options it holds in other companies in these industries, as well as 7.7 billion rubles.

The company may inject an additional investment of up to 5.1 billion rubles into the capital of the joint venture depending on the achievement of a number of KPIs by the contributed assets over the 12-month period following the closing of the deal.

Mail.Ru Group will also ensure consolidation of no less than 75% in Citymobil by the joint venture prior to the deal closing.

Sberbank will contribute to the new company its 35% in Foodplex and about 38 billion rubles in cash. The bank may also raise its injection by an additional 13 billion rubles depending on the KPI achievement.

“All financing will be invested in the JV in the form of cash-in and used to drive organic development, consolidate assets and fund potential transactions in the foodtech and mobility segments that are complementary to the existing O2O (online-to-offline) businesses,” the statement read.

“Sberbank and Mail.Ru Group plan to create a leading Russian O2O services platform focused on the key areas of food and transportation. The joint venture will operate in Russia’s two largest digital consumer markets that are expected to have a combined value of more than 1 trillion rubles over the next three years with an anticipated CAGR (compound annual growth rate) of more than 30%,” the companies said.

Sberbank and Mail.Ru Group may also hold an initial public offering (IPO) of the new company in the next few years.

“In the future, the parties will consider the possibility of bringing in additional investors to facilitate the further development of the platform…The strategic partnership will…create a market leading business with the potential for an IPO in the next few years,” the companies said.

(63.1162 rubles – U.S. $1)

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