Yandex N.V. to Sell Its Russian Business for RUB 475 Billion

Yandex N.V. to Sell Its Russian Business for RUB 475 Billion
Photo: Shutterstock 05.02.2024 223

By July 31, 2024, Yandex N.V. will change its name and stop using Yandex brands.

Netherlands-based Yandex N.V. has concluded a deal to sell its Russian business for 475 billion rubles ($5.2 billion) to a consortium of private investors, the company said in a press release. 

This price is roughly half of its market capitalization as per the average share price in the three months ending January 31, 2024. The reason for this markdown is due to a rule imposed by the Russian Government, which stipulates that any sale of Russian assets by parent companies incorporated in countries deemed “unfriendly” by Russia, will be subject to a “mandatory discount” of at least 50 percent. And the Netherlands, as a member of an EU bloc that has imposed sanctions on Russia, falls into that “unfriendly” category.

The new parent company of the Russian Yandex will be the International Company Joint Stock Company (ICJSC) Yandex, a private and independent company whose shares will be traded on the Moscow Exchange.

“The proposed transaction will allow shareholders to recover some value for the businesses that we are divesting, while unlocking new growth potential for the international businesses we will retain and enabling the divested businesses to operate under new ownership,”

said John Boynton, Chairman of the Board of Directors of Yandex N.V.

In terms of who the buyers are, well, Yandex says it will be “Consortium.First” led by senior managers from Yandex’s Russian businesses, who will provide some of the acquisition capital via a special purpose limited liability company called “FMP.” Other investors include an entity called Argonaut, which Yandex says is a closed-end mutual investment combined fund owned by Russian oil company PJSC Lukoil; “Infinity Management,” a special purpose joint stock company owned by venture capitalist and entrepreneur Alexander Chachava; “IT.Elaboration,” a special purpose joint stock company owned by Pavel Prass, CEO of investment manager Infinitum Asset Services; and “Meridian-Servis,” a special purpose limited liability company owned by businessman and former politician Alexander Ryazanov.

None of the shareholders has a controlling stake, Yandex clarified in a statement. "Consortium.First" will be able to nominate six out of 10 members of the Board of Directors of Yandex. Artem Savinovsky will remain the CEO of Yandex.

The Russian company will remain private, independent and public, and will retain the businesses, services and assets of the Yandex N.V. group, with the exception of foreign startups (Nebius, Toloka, Avride and TripleTen) and a data center in Finland.

Yandex said it will continue to develop search, city, entertainment and educational services, as well as cloud technologies, autonomous cars and artificial intelligence technologies.

The deal is subject to regulatory approvals. It is planned to be finalized in two phases. The first could take place in the first half of the year and the next about seven weeks after that, according to Yandex N.V.'s website.

Sources:  Yandex, Vedomosti

digital markets  Russia 

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