UPDATE 1-TUI Travel establishes Russian joint venture

* Agreement with Mordashov’s S-Group Capital

* 1st major tour operator to enter Russian market

* To invest up to $20 million

LONDON, April 15 (Reuters) - Europe's biggest travel firm TUI Travel TT.L said on Wednesday it had finalised terms for entering the booming Russian travel market through a joint venture with Oligarch Alexei Mordashov CHMFq.L.

The company, which first announced plans to create a joint venture with the Severstal chief executive’s S-Group Capital Management last April, said it had now signed a definitive agreement to that effect.

The joint venture, which will be 51 percent owned by S-Group and 49 percent owned by TUI Travel, has agreed to acquire majority stakes in assets owned by two tour operators in Russia and Ukraine, TUI Travel said in a statement.

“TUI Travel will be the first major international tour operator with a significant presence in Russia,” said Chief Executive Peter Long.

TUI Travel said the joint venture is expected to invest up to $40 million in the region by the end of 2009.

TUI Travel’s share of the investment expected to be up to $20 million, to be paid either in cash or the value of assets contributed to the joint venture.

Reporting by Matt Scuffham