Yandex N.V., the parent company of the Russian internet giant, announced today a binding agreement to sell its Russia-based businesses and certain international operations to a consortium led by its Russian management team.
Yandex N.V. is a Dutch-registered international technology company, but its core operations were previously based in Russia, where it served as the country's leading search engine and internet giant.
This move marks a significant restructuring for the company in response to the ongoing geopolitical situation.
- Total consideration: RUB 475 billion (around $6.2 billion)
- Payment: Combination of cash and Yandex Class A shares
- Purchaser: "Consortium.First," led by Yandex Russia's management team and supported by four financial investors
- Completion: Two stages, first half of 2024
- Post-divestment: Yandex retains international businesses like Nebius AI and Toloka AI, focusing on Europe, US, Asia, and the Middle East
Reasons for the sale:
- Geopolitical challenges: The deal comes after Yandex faced difficulties operating in Russia due to sanctions and the ongoing conflict in Ukraine.
- Unlocking value: The company believes the sale allows shareholders to recover some value and positions the retained businesses for future growth.
Future of Yandex:
- Focus on international growth: Yandex will shift its focus to developing its non-Russian businesses, building an AI-powered suite of services.
- New branding: The company will no longer use the Yandex brand after the transition period.
- Shareholder approval: The transaction requires approval from Yandex shareholders.
Yandex holds a strong majority share in the Russian search market, estimated to be around 71.3% as of January 2024 (Statcounter Russia Search Engine Market Share).
Associated Press (AP) reports on the sale of Yandex's Russian operations to local buyers marking one of the biggest exits by a Western company since the Ukraine invasion.
Discounted sale: The price reflects a 50% discount mandated by Moscow for companies from "unfriendly" countries.
Complexities of exiting Russia: The deal highlights the challenges firms face when trying to leave the Russian market due to sanctions and government restrictions.
Yandex's future: The company will retain its international businesses but lose over 95% of its Russian revenue, assets, and employees.
Kremlin's perspective: Welcomes the deal, emphasizing the retention of Russian management and continued operations.