Yandex NV (NASDAQ:YNDX) and Sberbank of Russia reported that they have finalized a binding deal to establish a joint venture formed on the Yandex.Market platform. The firms previously reported their plan to pursue the deal on August 9, 2017.
Following the definitive deal, Sberbank will look for new shares on Yandex.Market platform for 30 billion rubles, i.e. around $500 million), recording it at 60 billion rubles, i.e. nearly $1 billion, on a post-money basis, prior to taking into account any prospective future synergies. They will have equal stakes in the firm, with 10% of the firm’s shares to be released to an equity incentive foundation and given for imminent grants of equity awards to employees and management of Yandex.Market.
This platform will engage in e-commerce, with a major focus on establishing a B2C web retail market. In the Russian Federation, the Baltic states, Georgia and other CIS states, Sberbank and Yandex will engage in the main business exclusively through Yandex.Market platform.
Yandex.Market will endure to work under the existing management team directed by Maxim Grishakov, its CEO. He will join the board of Yandex.Market platform, which will also comprise three other representatives, each from Sberbank as well as Yandex.
Yandex will continue to offer branding and technology, while both Sberbank and Yandex will offer promotion support to the deal. Both firms will use strength of their particular core businesses to support growth of Yandex.Market going forward. The deal is subject to usual closing conditions and regulatory consents, and is anticipated to close in 1H2018.
Yandex.Market is one of the leading players in the Russian e-Commerce market, with more than 100 billion rubles GMV in the initial three quarters of 2017. It serves a monthly audience of more than 20 million customers, providing them access to more than 20,000 international and domestic merchants and product offerings of as much as 150 million.