Russia’s MegaFon announced a deal to acquire a majority stake in internet company Mail.ru, a move that beefs up the operator’s content play amid slowing mobile growth.

In a statement, MegaFon said it is buying 33.4 million shares, giving it almost 64 per cent voting rights in the company, for an initial fee of $640 million, with $100 million due one year after completion.

The deal effectively sees Russian billionaire Alisher Usmanov consolidate his technology holdings into the wireless sector, points out Bloomberg.

Along with partners, he controls Mail.ru and co-owns MegaFon with Sweden’s Telia.

Mail.ru is described as the leading internet company in Russia by MegaFon, operating the top two social networks in the country, as well as a gaming and messaging platform, with 93 per cent of Russian internet users accessing its platforms.

Explaining the rationale behind the deal, MegaFon noted that the traditional mobile market in Russia has faced a period of “no growth”, due to a fully penetrated market, decreasing ARPUs and increased competition for high quality subscribers.

It said the acquisition is “intended to create a unique digital player in Russia with the largest audience”.

“Mail.ru Group is a natural fit to MegaFon to reinforce its strategy focused on digital trend, mobile data monetisation and new product offerings,” added the statement.

The two companies said they will also jointly develop new services.

MegaFon expects to complete the deal in the first quarter of 2017.