In a groundbreaking move, Yandex NV, often hailed as “Russia’s Google,” has inked a colossal deal worth 475 billion roubles ($5.21 billion) with a consortium of Russian investors.
More Read
This transaction, marking the most significant corporate exit from the nation since Moscow’s incursion into Ukraine nearly two years ago, signifies a seismic shift in Russia’s tech landscape.
The orchestrated deal orchestrated by the Kremlin will see Russia’s foremost tech powerhouse transition entirely into local ownership, with a fund ultimately tied to oil behemoth Lukoil leading the acquisition charge. This move solidifies Yandex’s retreat from Western tech spheres.
[adinserter name="Two"]Once lauded as a potential global juggernaut, Nasdaq-listed Yandex has been instrumental in shaping Russia’s digital landscape, boasting leading online services ranging from search engines to advertising and ride-hailing platforms.
However, dissent brewed when Yandex’s co-founder, Arkady Volozh, who relocated to Israel in 2014, openly condemned Russia’s military intervention in Ukraine as “barbaric” back in August. This vocal opposition spurred murmurs about nationalizing Yandex within Kremlin circles.
[adinserter name="Three"]Despite these rumblings, concerns over a potential brain drain in the tech sector stymied such plans, culminating in a convoluted agreement that would see over 95% of Yandex’s revenue-generating businesses remain in Russia under local control.
Endorsing the deal, the Kremlin has been locked in protracted negotiations with Yandex for roughly 18 months, aiming to extricate the Russian operations from its Dutch parent, Yandex NV.
[adinserter name="Four"]Yandex has long strived to maintain an image of autonomy from Kremlin influence, a narrative challenged by its increasing status as a strategic national asset.
Valuing Yandex at $10.2 billion based on a three-month weighted average of its Moscow Exchange shares, the deal reflects a stark decline from its pre-invasion market cap of nearly $30 billion in late 2021.
[adinserter name="Five"]Notably, the sale price incorporates a mandated discount of at least 50% to “fair value,” a stipulation enforced by Russia’s government for foreign asset transactions.
With nearly 88% of Yandex’s ownership structure comprising free-float shares, numerous Western funds are among its shareholders.
[adinserter name="Six"]In a statement, Yandex NV outlined that the deal entails a cash component of no less than 230 billion roubles, alongside approximately 176 million Yandex NV Class A shares.
Notably, the cash consideration will be denominated in Chinese Yuan (CNH) and transacted outside Russia, signalling a definitive break from the Yandex brand post-transaction completion.
[adinserter name="Seven"]The purchasing entity, Consortium. First, emerges as a freshly minted investment fund under the stewardship of trustee Solid Management.
[adinserter name="One"]Spearheaded by critical members of Yandex’s Russian leadership cadre, the Consortium receives backing from four financial investors, including Argonaut – an investment fund ultimately linked to Lukoil.
[adinserter name="Eight"]Additionally, three other entities – Infinity Management and IT. Elaboration and Meridian-Servis – helmed by Alexander Chachava, Pavel Prass, and Alexander Ryazanov, respectively, participate in this landmark acquisition, underscoring the depth and complexity of the deal.
