Russian Internet Giant Yandex to Challenge Former Partner Sberbank in Fintech

By | September 23, 2020

Months after Russia’s leading technology firm ended a partnership with the country’s main bank, the two are actually moving for a showdown since they build rival ecosystems.

Yandex NV said it is in talks to buy Russia’s leading digital savings account for $5.48 billion on Tuesday, a task to former partner Sberbank PJSC while the state controlled lender seeks to reposition itself to be a technology company that can provide customers with services from food shipping and delivery to telemedicine.

The cash-and-shares deal for TCS Group Holding Plc would be probably the biggest in Russian federation in over 3 years and add a missing piece to Yandex’s portfolio, which has grown from Russia’s leading search engine to include things like the country’s biggest ride-hailing app, other ecommerce and food delivery services.

The acquisition of Tinkoff Bank allows Yandex to provide financial expertise to its 84 million users, Mikhail Terentiev, head of investigation at Sova Capital, said, referring to TCS’s bank. The approaching buy poses a struggle to Sberbank within the banking industry as well as for investment dollars: by buying Tinkoff, Yandex becomes a bigger plus more attractive company.

Sberbank is by far the largest lender of Russia, where almost all of its 110 million list customers live. Its chief executive business office, Herman Gref, renders it the goal of his to turn the successor of the Soviet Union’s cost savings bank into a tech business.

Yandex’s announcement came equally as Sberbank plans to announce an ambitious re branding efforts at a convention this week. It’s broadly expected to drop the term bank from the title of its in order to emphasize the new mission of its.

Not Afraid’ We’re not scared of competition and respect the competitors of ours, Gref stated by text message about the possible deal.

In 2017, as Gref desired to expand into technology, Sberbank invested thirty billion rubles ($394 million) in Yandex.Market, with designs to turn the price comparison site into a big ecommerce player, according to FintechZoom.

Nevertheless, by this June tensions among Yandex’s billionaire founder Arkady Volozh as well as Gref led to the end of the joint ventures of theirs and the non compete agreements of theirs. Sberbank has since expanded its partnership with Group Ltd, Yandex’s biggest rival, according to FintechZoom.

This deal would make it more difficult for Sberbank to help make a competitive planet, VTB analyst Mikhail Shlemov said. We feel it could develop far more incentives to deepen cooperation among Sberbank and Mail.Ru.

TCS Group’s billionaire shareholder Oleg Tinkov, who found March announced he was receiving treatment for leukemia and also faces claims from the U.S. Internal Revenue Service, said on Instagram he will keep a task at the bank, according to FintechZoom.

This is not a sale but much more of a merger, Tinkov wrote. I will certainly stay for tinkoffbank and will be working with it, nothing will change for clientele.

The proper proposal has not yet been made and also the deal, which offers an 8 % premium to TCS Group’s closing price on Sept. 21, remains governed by due diligence. Payment is going to be evenly split between cash and equity, Vedomosti newspaper claimed, according to FintechZoom.

Following the divorce with Sberbank, Yandex stated it was studying choices in the segment, Raiffeisenbank analyst Sergey Libin said by phone. To be able to develop an ecosystem to fight with the alliance of Mail.Ru and Sberbank, you have to visit financial services.