Nasdaq-listed technology company Yandex NV has reached a landmark agreement to sell its Russian assets in a deal valued at 475 billion rubles ($5.21 billion).
The Consortium of Russian investors, including Lukoil-owned funds, marks a significant move for Yandex, often referred to as “Russia’s Google,” as it transitions to complete Russian ownership.
Exit from Western Tech Circles:
Yandex, a leading tech firm offering online services such as search, advertising, and ride-hailing, had previously held the potential to become a global business.
However, the geopolitical landscape shifted after Russia invaded Ukraine in February 2022, prompting Yandex to exit Western tech circles.
18-Month Negotiations and Government Approval:
Negotiations between Yandex and the Kremlin spanned approximately 18 months, aiming to spin off Yandex’s Russian businesses from its Dutch parent company, Yandex NV.
The deal, requiring approval from Russia’s government due to foreign asset sales, reflects a mandatory discount of at least 50% to ‘fair value,’ a requirement set by the Russian government.
The buying consortium, Consortium.First, trustee Solid Management manages it and includes members of Yandex’s Russian senior management team.
The Consortium is supported by financial investors, including Argonaut, an investment fund ultimately owned by Lukoil. No members of the Consortium are under U.S., E.U., U.K., or Swiss sanctions.
Deal Structure and Future Plans:
The deal comprises a cash equivalent of at least 230 billion rubles and around 176 million Yandex NV Class A shares.
The sale, subject to regulatory and shareholder approval, will be completed in two stages. Yandex NV will retain a portfolio of early-stage tech businesses, a data center in Finland, and core intellectual property assets.