Russian Internet Giant Yandex to Challenge Former Partner Sberbank in Fintech

Months after Russia’s leading technology corporation concluded a partnership together with the country’s main bank, the two are actually heading for a showdown because they build rival ecosystems.

Yandex NV said it’s in talks to purchase Russia’s leading digital bank for $5.48 billion on Tuesday, a test to former partner Sberbank PJSC when the state-controlled lender seeks to reposition itself as an expertise company that can provide consumers with solutions from food delivery to telemedicine.

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

The acquisition of Tinkoff Bank enables Yandex to provide financial expertise to its eighty four million subscribers, Mikhail Terentiev, head of research at Sova Capital, said, talking about TCS’s bank. The impending deal poses a challenge to Sberbank in the banking sector as well as for expense dollars: by getting Tinkoff, Yandex becomes a greater and more appealing business.

Sberbank is definitely the largest lender in Russian federation, where most of its 110 million retail customers live. Its chief executive office, Herman Gref, renders it the goal of his to switch the successor on the Soviet Union’s savings bank into a tech business.

Yandex’s announcement came just as Sberbank plans to announce an ambitious re branding effort at a seminar this week. It’s commonly expected to decrease the phrase bank from its title to be able to emphasize its new mission.

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

In 2017, as Gref desired to broaden into technology, Sberbank invested thirty billion rubles ($394 million) in Yandex.Market, with plans to turn the price-comparison site into an important ecommerce player, according to FintechZoom.

But, by this particular June tensions between Yandex’s billionaire founder Arkady Volozh as well as Gref resulted in the conclusion of the joint ventures of theirs and their non-compete agreements. Sberbank has since expanded its partnership with Mail.ru Group Ltd, Yandex’s biggest competitor, according to FintechZoom.

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

TCS Group’s billionaire shareholder Oleg Tinkov, exactly who in March announced he was getting treatment for leukemia as well as faces claims from the U.S. Internal Revenue Service, said 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 stay at tinkoffbank and often will be dealing with it, absolutely nothing will change for clientele.

The proper proposal has not yet been made and the deal, which provides an eight % premium to TCS Group’s closing value on Sept. 21, is still subject to thanks diligence. Payment is going to be evenly split between dollars and equity, Vedomosti newspaper reported, according to FintechZoom.

Following the divorce with Sberbank, Yandex said it was studying options of the sector, Raiffeisenbank analyst Sergey Libin said by phone. In order to produce an ecosystem to compete with the alliance of Sberbank and Mail.Ru, you’ve to visit financial services.