Weeks right after Russia’s leading technology company concluded a partnership together with the country’s biggest bank, the 2 are actually heading for a showdown as they develop rival ecosystems.

Yandex NV said it’s in talks to buy Russia’s top digital bank account for $5.48 billion on Tuesday, a challenge to former partner Sberbank PJSC when the state-controlled lender seeks to reposition itself to be an expertise company that can provide customers with solutions at food distribution to telemedicine.

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

The acquisition of Tinkoff Bank allows Yandex to provide financial expertise to its eighty four million subscribers, Mikhail Terentiev, mind of research at Sova Capital, said, referring to TCS’s bank. The impending buy poses a struggle to Sberbank within the banking sector and also for investment dollars: by buying Tinkoff, Yandex becomes a larger and more seductive company.

Sberbank is the largest lender of Russia, in which most of its 110 million list clients live. The chief of its executive office, Herman Gref, renders it his goal to switch the successor of the Soviet Union’s savings bank into a tech business.

Yandex’s announcement came just as Sberbank strategies to announce an ambitious re-branding attempt at a convention this week. It is widely expected to drop the phrase bank from its title in order 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 possible deal.

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

However, by this particular June tensions among Yandex’s billionaire founder Arkady Volozh in addition to the Gref resulted in the end of their joint ventures 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 will allow it to be more difficult for Sberbank to help make a competitive ecosystem, VTB analyst Mikhail Shlemov said. We feel it might produce more incentives to deepen cooperation between Mail.Ru and Sberbank.

TCS Group’s billionaire shareholder Oleg Tinkov, exactly who contained March announced he was getting treatment for leukemia and also faces claims coming from the U.S. Internal Revenue Service, said on Instagram he is going to 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 clients.

A formal proposal hasn’t yet been made and the deal, which provides an 8 % premium to TCS Group’s closing price on Sept. 21, is still governed by thanks diligence. Transaction will be evenly split between equity as well as money, Vedomosti newspaper reported, according to FintechZoom.

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