LONDON: Group and Sberbank have completed the formation of a joint venture (JV) focused on digital technologies for food and transportation markets. All the necessary corporate governance and regulatory approvals, including the approval from Federal Antimonopoly Service, have been received and all documents have been signed.

The parties have equal stakes in the JV, with up to 10% of shares to be potentially allocated for the long-term motivation program to incentivize O2O platform’s employees.

The parties will contribute their assets (mobility, grocery delivery and food order and delivery services complementary to the platform), along with investment of up to RUB 64.6 bn if business KPIs are met by November 2020.

According to partners’ estimates, the funding being injected into the JV will be sufficient for the platform to implement their full business plans and reach break-even. In the future, the parties may consider bringing in additional partners to facilitate the platform’s further development.

The corporate governance structure will set up a Board of Directors, which will include 3 members from Group, 3 members from Sberbank and one independent director.

The Board will be in charge of the JV’s strategy and identify its top priority growth areas. The parties agreed that the Chairman of the Board position will have an annual rotation.

Boris Dobrodeev will be elected as the first Chairman of the Board, and in a year’s time, a Sberbank executive will replace him as the next Chairman of the Board. The companies in the O2O JV will maintain their current management teams.

Boris Dobrodeev, CEO, Group: “We’d started collaborating with Sberbank even before the deal was closed, and we saw excellent results. We are pleased to move to a new phase of our partnership that will allow us to fully leverage the synergies of our ecosystems. We agreed that all the expertise in transportation and food tech accumulated by Group and Sberbank will be invested in the development of the new O2O platform. I believe that our joint efforts will have a compound effect, and we will be able to provide users and partners with a platform offering the best deals and the widest range of services.”

Lev Khasis, First Deputy Chairman of the Executive Board, Sberbank: “We’ve managed to finalize the terms of a complicated deal fast, a deal that involved multiple parties and assets. I’d like to thank all of our partners involved in the deals for their constructive and professional approach when rising up to the challenges we faced. We’re happy that all the legal formalities are behind us. Our teams have already run a whole range of integration projects that should enrich customer experience and make our food and mobility solutions convenient and indispensable for a vast number of people. We expect that our joint O2O platform’s products and services will be top choice for Russians.”

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