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Russian Internet Giant Yandex to Challenge Former Partner Sberbank in Fintech

Months after Russia’s leading technology firm ended a partnership together with the country’s main bank, the two are heading 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 test to former partner Sberbank PJSC as the state controlled lender seeks to reposition itself to be a technology business that can offer customers with solutions from food delivery to telemedicine.

The cash-and-shares deal for TCS Group Holding Plc would be the biggest in Russia in over three years and put in a missing portion to Yandex’s profile, that has grown from Russia’s top search engine to include things like the country’s biggest ride hailing app, other ecommerce and food delivery services.

The acquisition of Tinkoff Bank enables Yandex to offer financial expertise to its 84 million subscribers, Mikhail Terentiev, head of investigation at Sova Capital, said, referring to TCS’s bank. The pending buy poses a challenge to Sberbank inside the banking business and for investment dollars: by purchasing Tinkoff, Yandex becomes a larger and more appealing company.

Sberbank is by far the largest lender of Russia, in which the majority of its 110 million list customers live. The chief of its executive office, Herman Gref, makes it his goal to turn the successor on the Soviet Union’s savings bank into a tech company.

Yandex’s announcement came just as Sberbank plans to announce an ambitious re branding effort at a convention this week. It is commonly expected to drop the word bank from its name to be able to emphasize the new mission of its.

Not Afraid’ We are not afraid of competition and respect the competitors of ours, Gref said by text message about the prospective deal.

Throughout 2017, as Gref sought to develop into technology, Sberbank invested 30 billion rubles ($394 million) contained Yandex.Market, with blueprints to switch the price comparison site into a big ecommerce player, according to FintechZoom.

Nevertheless, by this specific June tensions involving Yandex’s billionaire founder Arkady Volozh in addition to the Gref resulted in the conclusion of the joint ventures of theirs and their non compete agreements. Sberbank has since expanded the partnership of its with Mail.ru Group Ltd, Yandex’s largest opponent, according to FintechZoom.

This particular deal would ensure it is harder for Sberbank to produce a competitive planet, VTB analyst Mikhail Shlemov said. We feel it could produce far more incentives to deepen cooperation among Mail.Ru and Sberbank.

TCS Group’s billionaire shareholder Oleg Tinkov, whom found March announced he was receiving treatment for leukemia as well as faces claims coming from the U.S. Internal Revenue Service, claimed on Instagram he will keep a role at the bank, according to FintechZoom.

This isn’t a sale but more of a merger, Tinkov wrote. I will undoubtedly continue to be at tinkoffbank and often will be working with it, nothing will change for clientele.

The proper proposal hasn’t yet been made and the deal, which features an 8 % premium to TCS Group’s closing value on Sept. twenty one, is still at the mercy of thanks diligence. Payment will be evenly split between money and equity, Vedomosti newspaper claimed, according to FintechZoom.

After the divorce with Sberbank, Yandex stated it was learning choices of the segment, Raiffeisenbank analyst Sergey Libin stated by phone. In order to produce an ecosystem to fight with the alliance of Mail.Ru and Sberbank, you have to go to financial services.