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Russia's MegaFon to acquire majority stake in Mail.Ru for $740M

As expected, Russian operator MegaFon agreed to acquire a voting stake of about 63.8% in internet firm Mail.Ru Group Ltd. for $740 million.

Under the deal, MegaFon will buy 11.5 million class A shares and 21.9 million ordinary shares in Mail.Ru from USM Holdings units New Media and Technology Investment LP, New Media Technologies Capital Partners Ltd. and Ardoe Finance Ltd., according to a Dec. 23 news release. Of the deal's total amount, $640 million will be paid on deal closing, with the remaining $100 million to be paid a year after.

The transaction is expected to enable the two companies to team up on commercial initiatives, such as improvements to MegaFon's digital offering and the rollout of a VKmobile offering for users of Mail.ru-owned social network VK.

Upon deal completion, MegaFon and Mail.ru will remain separate entities, with no changes expected in the management and business operations of both companies.

The transaction is subject to the approval of Russian antitrust authorities and other conditions. MegaFon's board also called shareholders for an extraordinary general meeting on Jan. 20, 2017, to approve the deal.