Alibaba Group, MegaFon, Mail.ru Group and RDIF complete formation of the joint venture

Alibaba Group, MegaFon, Mail.ru Group and the Russian Direct Investment Fund (RDIF) have completed an investment to establish a joint venture to integrate key Russian consumer Internet and e-commerce platforms and launch a leading joint venture on social commerce in Russia and CIS.

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The control share holding of JV AliExpress Russia is owned by Russian parties, and the Board of Directors includes representatives of Alibaba Group, MegaFon, Mail.ru Group and RDIF. Boris Dobrodeev will become Chairman of the Board of Directors of JV AliExpress Russia. The parties appointed two CEOs: Liu Wei, head of AliExpress Russia, and Dmitry Sergeev, first deputy CEO of Mail.ru.

The joint venture creates favorable conditions for entrepreneurs, consumers and Internet users in Russia and CIS, as well as accelerates the development of the growing digital economy of Russia by combining the resources and experience of all shareholders. As part of the partnership, JV AliExpress Russia and Mail.ru concluded a strategic cooperation agreement, which includes, among other things, traffic exchange and product initiatives. JV AliExpress Russia will use the platform Mail.ru Group to promote its services with a help of exclusive integration solutions and marketing programs.

Daniel Zhang, CEO of Alibaba Group, said: "Alibaba remains focused on fulfilling our mission of "making it easier to do business anywhere." JV Aliexpress Russia is an important part of Alibaba's globalization strategy and a key step towards our long-term goal of helping 10 million small businesses achieve profitability and serve 2 billion consumers worldwide. Together with Mail.ru Group, RDIF and MegaFon we want to accelerate the development of the digital consumer economy in Russia and CIS by enabling regional brands and small and medium-sized enterprises (SMEs) to find and serve their target consumers through our unique and innovative shopping environment".

As it was announced on June 5, 2019, each party contributed to JV Aliexpress Russia, including the following:

• Alibaba Group invested 100 million dollars and transferred to the joint venture AliExpress in Russia.
• MegaFon sold Alibaba Group its economic stake of 9.97% in Mail.ru Group in exchange for a 24.3% stake in JV AliExpress Russia.
• Mail.ru the Group transferred its e-commerce business Pandao and cash in the amount of 100 million dollars to the Joint Venture (another 82 million dollars will be transferred within 12 months. Financing of the first payment is carried out at the expense of borrowed funds). The company's share in the joint venture AliExpress Russia is 15.0%.
• RDIF has invested 100 million dollars in the joint venture and may acquire shares of the joint venture in the amount of 194 million dollars from Alibaba Group.