MegaFon Acquires a $740 Million Controlling Stake in Mail.Ru

January 5, 2017

Cleary Gottlieb is representing MegaFon, one of the major Russian telecommunications companies, in its $740 million acquisition of a controlling stake in Mail.Ru Group, the internet and social media group, from the USM Holdings, MegaFon’s controlling shareholder.

Under the terms of the proposed transaction, MegaFon will acquire 11.5 million Class A shares and 21.9 million ordinary shares representing an approximately 63.8 percent voting stake in Mail.Ru from New Media and Technology Investment LP, New Media Technologies Capital Partners Limited and Ardoe Finance Limited, subsidiaries of USM Holdings, for an agreed consideration of $640 million on completion, plus an unconditional deferred payment of $100 million due one year post completion.

This transaction was agreed on December 23, 2016, and is subject to regulatory approvals.

This deal comes after Cleary’s Moscow office also recently represented SIBUR, Russia’s leading vertically integrated gas processing and petrochemicals company, in the sale of a 10 percent shareholding in the company to Silk Road Fund, the Chinese state-owned investment fund. This is one of the largest Chinese investments ever made in a Russian business, and the largest agreed in 2016. The firm has also recently represented Lenta LLC, one of the largest retail chains in Russia, in its RUB 11.4 billion (approximately $170 million) acquisition of the Russian food retail business of Kesko Oyj, the Finnish retailer; and represented Nexans, the world’s second-largest manufacturer of copper and optical fiber cables, in a sale of 100 percent interest in its Russian cable production subsidiary, Nexans Rus, to Impex Electro; and represented Gazprom, the world’s largest producer of natural gas, in an asset swap transaction with OMV, one of Austria’s largest listed industrial companies.