Mail.Ru, one of the internet leaders in Russia, announced the acquisition of the 48.01% of dominant Russian social media VKontakte it didnt already own for $1.47bn, settling shareholder disputes and looking to tap into the 92m monthly average user base of VK.com.
The move follows almost a year-long confrontation between Mail.Ru and VK.coms now-former minority shareholder United Capital Partners over strategy and control.
“The consolidation of 100% of VK and the termination of all outstanding shareholder disputes will allow focus on the product and its further development,” said Dmitry Grishin, Co-Founder and CEO of Mail.Ru Group. “We respect the successful results driven by VKs team and do not plan any significant changes.”
Pavel Durov, former CEO of VK.com, was accused of mismanaging the company by UCP, resulting in his resignation debacle, which ultimately led to him leaving the company. Mr Durov welcomed the acquisition, Mail.Rus statement show.
The complete ownership of VK.com means complete control over the 92m strong monthly user base of Russias largest social network. It would complement Mail.rus other social networks, Odnoklassniki and My World, which boast 54m and 28m users, respectively. Meanwhile, Facebook has 13 million.
Whether the Russian state would allow much room to monetize these flows is not quite certain. A number of legislation was passed to curb internet freedom in Russia, while Russian President Vladimir Putin even referred to the internet as a “CIA spy project”.
Mail.Ru was up 3.30% to trade at $30.99 per share by 11:58 GMT in London today, valuing the company at $6.44bn. The stock is down 18.55% from a year ago, but is set to rebound. 16 analysts offering 12-month price targets for the Financial Times, have a median target of $39.44 for Mail.Ru Group Ltd, with a high estimate of $50.00 and a low estimate of $29.00.
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