Russia and Ukraine have had very tense relations since the last several years, and it seems currently relations are at all time low. As a result of that, Ukrainian president Petro Poroshenk signed on Monday a decree which prevents the operation of Russian sites and online services in Ukraine. To be precise – a so called web sanctions apply to 468 legal entities and 1228 individuals from Russia.
It is a well-known fact that majority of the most popular sites and online services come from Russia, and two online groups Yandex and Mail.ru owns the biggest number of those popular services. Ukraine users will not be able to use Yandex, Mail.ru. and services like Odnoklassniki (OK) and Vkontakte (VK) which are part of Mail.ru Group and many services from Yandex like search engine, maps, taxi app etc.
Both Yandex and Mail.ru said that this decision will not have significant effect on their financial results. Mail.ru rep. expressed dissapointment with this and called it as “clearly politically-driven decision”. Around 25 million Ukrainian users will be affected, who regularly use online services from Russian companies.
This will give opportunity to local and foreign companies to gain better market share in the Ukrainian market. From the Ukrainian community many are against this decision and call it as “censorship”.
Russian mobile services provider MegaFon and Sberbank have concluded a contract to launch a $592m credit line that expires in 2024 to finance a stake take over in Mail.ru Group. The money will enable the takeover of 15.2% of shares in the authorized capital of Mail.ru Group (63.8% of voting shares).
The deal will amount to $640 million, containing $540 million to be disposed when the transaction is closed and another $100 million to be given after one year. The shares will be sold by: New Media and Technology Investment LP, New Media Technologies Capital Partners Limited and Ardoe Finance Limited. These companies belong to the USM, a holding company ruled by Russian billionaire Alisher Usmanov. Yet, when the deal is sealed, Usmanov will still hold an indirect interest in Mail.Ru Group, because USM owns over 56% of MegaFon.
MegaFon’s partnership with Sberbank enables it to purchase the Mail.ru shares on alluring conditions. The contract also modificated the terms of three going credit lines which amount to $1.64bn, and which were given to MegaFon in 2012 and 2016. The new terms have lower interest rates and reconsidered early payoff terms.
The takeover plan arises as both companies are expanding cooperation to jointly develop new products and synergies. For example, the two companies have decided to start a special deal for Vkontakte’s mobile users. The new service, called ‘VK Mobile’, will profit from the infrastructure of Megafon and its affiliate Scartel. Mail.Ru Group and MegaFon have also decoded to jointly create predictive data analysis instruments to rationalize user segmentation.