PJSC MegaFon in Joint Venture

August 10, 2018

Cleary Gottlieb is representing PJSC MegaFon, which has announced its intention to incorporate a joint venture with JSC Gazprombank, Rostec Corporation, and USM Holdings to develop digital services and implement projects in the digital economy.

The partnership will bring together the expertise of these leading businesses – in telecommunications, IT, financial services, and hi-tech sectors of industry – enabling them to enter new markets and create cross-sector industrial solutions.

A new company, JSC MF Technologies (MFT), has been set up to make best use of the partners’ resources and skills. It is currently owned by Lefbord Investment Limited (Lefbord), a 100 percent subsidiary of MegaFon. Under the terms of the joint venture, MegaFon will contribute around 11.5 million Class A shares of Mail.Ru Group Limited to MFT, comprising a 5.23 percent economic share, and Lefbord will sell stakes in MFT to Gazprombank (35 percent), USM (9 percent), and Rostec (11 percent), leaving Lefbord with a stake of 45 percent.

MegaFon PJSC is a leading Russian integrated telecommunication service provider, operating in all segments of the telecommunications markets in Russia, as well as the Republics of Abkhazia, South Ossetia, and Tajikistan. USM Holdings Ltd is a diversified international company with significant interests across the metals and mining, telecoms, internet, and media sectors. Rostec Corporation is a Russian corporation that was established in 2007 to facilitate the development, production, and export of high-tech industrial products designed for civilian and military applications. Founded by the world’s largest gas producer and exporter, Gazprom, to provide banking services for gas industry enterprises, Gazprombank has since become a leader in the banking sector. Mail.Ru Group is the largest internet business in Russia in terms of total daily audience.