Parent company of major Russian search engine Yandex to divest Russian operations as it refocuses amidst Ukraine conflict
The deal, which is to see Nasdaq-listed, Netherlands-based holding company Yandex NV sell the Russian business for cash and shares worth 475 billion roubles ($5.2bn, £4.2bn), substantially less than its estimated market value, is the product of more than 18 months of negotiations with the Russian government.
Russia’s invasion of Ukraine nearly two years ago, on 24 February 2022, prompted the exit of many foreign-owned businesses, with many selling assets on unfavourable terms, while the Russian government seized others, such as assets belonging to Danone and Carlsberg.
The Russian Yandex operations, including its flagship search engine, which make up about 95 percent of the group’s revenue, assets and employees, are to be acquired by a consortium of investors including members of the company’s management and Argonaut, a fund owned by oil company Lukoil, as well as companies owned by prominent Russian investors.
Following the sale the Dutch holding company is to rebrand and retain control of several internationally focused businesses staffed by some 1,300 former Yandex employees in areas including self-driving, cloud, data and education, as well as a data centre in Finland and intellectual property licences.
The parent company said the sale price “reflects a mandatory discount of at least 50 percent” to “fair value” under Russian government rules on Western companies exiting the country.
“Yandex is one of the economy’s national champions in high tech and one of the largest companies. It’s important for us that the company continues to work in the country,” said Dmitry Peskov, spokesman for Russian president Vladimir Putin, according to Interfax.
Yandex co-founder Arkady Volozh, who moved to Israel in 2014, resigned as chief executive in 2022 after being placed under EU sanctions, transferring his voting rights to the parent company’s board.
He later became one of the few leading Russian businessmen to speak out against the war in Ukraine, prompting criticism from Putin.
John Boynton, chair of Yandex’s Dutch parent company, said the group had faced “exceptional challenges” and believed the deal was “the best possible solution for our shareholders, our teams and our users in these extraordinary circumstances”.
The firm expects the deal to conclude in the first half of 2024 following shareholder and regulatory approval.