Yandex NV has closed a 475 billion rouble (5.21 billion US dollars) deal to sell the so-called “Russian Google” to a group of Russian investors, in the biggest exit from the country since Russia invaded Ukraine and marking Yandex’s departure from the Western technology community, on Monday, the 5th of December, reports Reuters.
Once seen as a potential global player among Russian companies, Yandex has been a leader in online services including search, advertising and ride-hailing in Russia.
Co-founder Arkady Volos, who has lived in Israel since 2014, criticised Russia’s invasion of Ukraine as “barbaric” in August.
This stance prompted discussions in the Kremlin about nationalising Yandex, talks that led to a complex deal under which Yandex companies will remain in Russia and come under Russian control.
The Kremlin has been negotiating with Yandex for about 18 months to separate the Russian companies from the Dutch parent company Yandex NV.
The recently concluded deal is worth 10.2 billion US dollars,
based on a three-month weighted average share price on the Moscow stock exchange. Before the Russian invasion of Ukraine, Yandex had a market value of almost 30 billion US dollars at the end of 2021.
The sale price includes a mandatory discount of at least 50% of the “fair value”, which is a Russian government requirement for the sale of foreign assets.
The company has stated that the transaction involves at least 230 billion roubles in cash and approximately 176 million in Yandex NV Class A shares. The cash portion will be paid in Chinese yuan outside Russia and the Yandex brand will no longer be used once the transaction is completed.
The buyer, Consortium First, managed by Solid Management, is led by Yandex’s Russian senior management team and financially backed by four investors, including Lukoil-owned Argonaut. The consortium includes Infinity Management, IT Elaboration and Meridian-Servis, owned by Alexander Chachav, Pavel Prasad and Alexander Ryazanov respectively.
None of the consortium members is subject to US, European Union, British or Swiss sanctions, a requirement that has excluded other potential Russian buyers, sources told Reuters.
Yandex NV Chairman John Boynton said the deal was the best solution for shareholders and users in “extraordinary circumstances”. Yandex NV will retain a portfolio of four early-stage technology companies in the cloud, data solutions, self-driving and education technology sectors, a data centre in Finland, intellectual property assets and temporary licences until the end of 2024.
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