Russia's Sberbank and Mail.Ru on verge of dividing assets as JV nears split

MOSCOW: Russia's largest lender Sberbank and internet firm Mail.Ru are on the verge of dividing assets in their ride-hailing and food delivery joint venture due to a wide range of disagreements, three sources close to both sides said.

The partners are discussing how to split the business, a person close to Sberbank's supervisory board said, in a blow to the lender's plans to remodel itself as a tech company and diversify into non-banking businesses.

The joint venture, set up in December 2019, encompasses the food delivery app Delivery Club, ride-hailing service Citymobil and other assets, with each partner holding a 45% stake.

According to Sberbank's accounts, the venture reported a loss of 27.8 billion roubles ($366.37 million) in 2020.

It finally became clear in the winter that "the JV will not last", one of the sources told Reuters, with a Sberbank representative at a Mail.Ru Group board meeting trying to block an annual bonus payment to top executives.

Two people confirmed that Lev Khasis, first deputy chairman of Sberbank's executive board, had voted against the bonus.

Sberbank denied that the venture was close to breaking up, calling the reports "unsubstantiated rumours".

"Already today the value of our joint business is much higher than the investments made in it, which offers great value for our shareholders," Sberbank said.

Mail.Ru declined to comment. On Tuesday, the group said it has no plans to exit the joint venture.

Last spring, when the partners disagreed over control issues and payment services, the two parties fought to maintain the venture, one person close to the matter said, but no such efforts are being made now. The two firms pumped an additional 12 billion roubles into the venture in August.

A break-up would bring an end to Sberbank's fourth attempt to make a non-banking partnership after failing to agree terms with Alibaba Group in 2017 and terminating ties with internet giant Yandex last summer after two years of cooperation.

The bank was also in talks to buy a large minority stake in Ozon, sources told Reuters in June, before the online retailer decided to go down the IPO route with a successful Nasdaq debut late last year.

The Financial Times first reported this week that Sberbank and Mail.ru were planning to break up their $1.6 billion tech joint venture.