Weeks after Russia’s leading technology firm ended a partnership together with the country’s main bank, the two are actually moving for a showdown as they develop rival ecosystems.
Yandex NV said it is in talks to invest in Russia’s leading digital bank for $5.48 billion on Tuesday, a task to former partner Sberbank PJSC while the state controlled lender seeks to reposition itself to be a technology company that can offer consumers with solutions at food delivery to telemedicine.
The cash-and-shares deal for TCS Group Holding Plc will be the biggest in Russia in at least three years and put in a missing piece to Yandex’s profile, that has grown from Russia’s leading search engine to include the country’s biggest ride-hailing app, other ecommerce and food delivery services.
The acquisition of Tinkoff Bank enables Yandex to provide financial expertise to its 84 million subscribers, Mikhail Terentiev, head of research at Sova Capital, claimed, referring to TCS’s bank. The pending deal poses a struggle to Sberbank inside the banking sector and for investment dollars: by buying Tinkoff, Yandex becomes a bigger plus more elegant company.
Sberbank is definitely the largest lender in Russian federation, where almost all of its 110 million list clients live. Its chief executive office, Herman Gref, has made it his goal to switch the successor on the Soviet Union’s cost savings bank into a tech business.
Yandex’s announcement came just as Sberbank plans to announce an ambitious re-branding effort at a seminar this week. It is widely expected to drop the word bank from its title in order to emphasize its new mission.
Not Afraid’ We are not fearful of levels of competition and respect our competitors, Gref stated by text message about the prospective deal.
Throughout 2017, as Gref desired to develop to technology, Sberbank invested thirty billion rubles ($394 million) in Yandex.Market, with plans to turn the price comparison site into a significant ecommerce player, according to FintechZoom.
But, by this particular June tensions involving Yandex’s billionaire founder Arkady Volozh and Gref led to the conclusion of their joint ventures and the non-compete agreements of theirs. Sberbank has since expanded its partnership with Mail.ru Group Ltd, Yandex’s strongest rival, according to FintechZoom.
This particular deal would make it more difficult for Sberbank to make a competitive environment, VTB analyst Mikhail Shlemov said. We feel it could produce more incentives to deepen cooperation among Mail.Ru and Sberbank.
TCS Group’s billionaire shareholder Oleg Tinkov, exactly who found March announced he was receiving treatment for leukemia and also faces claims from the U.S. Internal Revenue Service, said on Instagram he will keep a task at the bank, according to FintechZoom.
This isn’t a sale but more of a merger, Tinkov wrote. I’ll certainly continue to be at tinkoffbank and often will be dealing with it, nothing will change for clients.
A formal proposal has not yet been made and the deal, which offers an 8 % premium to TCS Group’s closing price on Sept. 21, remains at the mercy of thanks diligence. Transaction is going to be equally split between money and equity, Vedomosti newspaper reported, according to FintechZoom.
After the divorce with Sberbank, Yandex said it was studying options in the sector, Raiffeisenbank analyst Sergey Libin stated by phone. To be able to generate an ecosystem to contend with the alliance of Mail.Ru and Sberbank, you have to go to financial services.