Tech group Yandex on track to sell entire Russia business

The Dutch parent of tech group Yandex said on Friday it had successfully completed the first phase of a $5.2bn deal to sell the company, often dubbed “Russia’s Google”, to a consortium of Russian investors.

The Dutch entity, Yandex NV, said its stake in the Russian business has now been reduced to 28% and that this would fall to zero once the second phase completes in the first half of July.

It plans to invest some of the proceeds in its other businesses and return the rest to its remaining shareholders, probably through a share buyback.

Yandex is Russia’s dominant tech company with an array of services including ride-hailing and food delivery as well as online search and advertising, where it has gained market share since Alphabet’s Google stopped selling online ads in Russia after Moscow’s invasion of Ukraine.

But Yandex’s international ambitions — including the launch of a worldwide fleet of driverless “robotaxis” — were knocked back by the February 2022 invasion, which also halted the trading of shares in Yandex NV on Nasdaq. Many of its employees have left Russia.

Yandex has also sold its news feed and home page to state-controlled rival VK as part of moves to depoliticise its Russian business.

Yandex, which went public on Nasdaq in 2011 though Yandex NV had many Western investors among its shareholders, will now come under the full control of Russian investors.

It is being bought by a consortium made up of senior Yandex Russian management, a fund controlled by oil major Lukoil and three other companies owned by businessmen Alexander Chachava, Pavel Prass and Alexander Ryazanov.

The consortium last week announced terms for Yandex NV shareholders to either sell their shares or exchange them for shares in the Russian entity, MKPAO Yandex.

The $5.2bn sale is the largest deal by a Western-held company to exit Russia since the start of the war. It reflects a mandatory discount of 50%, as required by Russian law for the sale of Russian assets by parent companies in what Moscow considers “unfriendly” countries.

Yandex NV said it expected to rebrand itself and would retain a portfolio of four international businesses plus non-Russian assets, including a Finnish data centre, and minority investments in other tech businesses.

Reuters