Dutch company Yandex NV has agreed to sell its Russian businesses in a Kremlin-brokered 475-billion-rouble, or $5.21 billion, deal to a newly forged consortium, which includes Russian oil and gas company Lukoil.
Over years, Yandex emerged a premier Russian tech firm, earning the moniker "Russia's Google," and expanded into a ride hailing venture.
The sale, according to Yandex, is subject to adjustments, with payment in a combination of cash and YNV Class A shares, guaranteeing a minimum of 50 per cent in cash.
"Since February 2022, the Yandex group and our team have faced exceptional challenges. We believe that we have found the best possible solution for our shareholders, our teams and our users in these extraordinary circumstances," John Boynton, Chairman of the Board of Directors of Yandex NV, said in a statement.
The sale comes two years into the protracted Russia-Ukraine war, which was once decried by Yandex co-founder Arkady Volozh as "barbaric." The remark is likely to have not been lost on Russian authorities, which may anyway have been eyeing to scoop up the gigantic business through its proxies.
Investors will acquire stakes in Yandex International PJSC, registered in Russia's Kaliningrad special economic zone last year.
The Russian unit accounted for over 95 per cent of the Yandex Group's revenues and assets in the first nine months of 2023. The purchaser group, including Lukoil-linked funds and entrepreneurs, will see Yandex management holding the majority stake in the Russian business, with Lukoil having a 10 per cent stake.
The purchasing entity, Consortium.First, is a newly established closed-end mutual investment fund managed by Solid Management, a licensed Russian trust manager.
The consortium, which is led by senior management from our Russian businesses and supported by four financial investors, won't have a controlling stake.
The sale, conducted in two closings, involves selling a 68 per cent controlling stake in the Target. The first closing, subject to regulatory approvals and shareholder consent, involves a mix of 230 billion roubles in cash and up to 67.8 million YNV Class A shares.
Expected in the first half of 2024, the second closing, occurring approximately seven weeks later, will finalise the sale of the remaining stake using a combination of YNV Class A shares and cash.
Yandex, the owner of a well-known ride-hailing app and an e-commerce platform in Russia, experienced a decline of up to 7 per cent in Moscow trading following the announcement.
The shares later recovered slightly, trading down approximately 3.4 per cent as of 11.20 am local time.
Yandex NV will maintain a portfolio of international businesses and non-Russian assets, focusing on developing an AI cloud platform and advancing self-driving technologies.
"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. Yandex is a unique story," Boynton said.
He added, "I am proud to have been a part of that story since the very beginning, and I am proud to be part of the next chapter. We believe that the proposed sale will position both parts of the current group to develop and grow for the benefit of their stakeholders.”
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