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5 Feb, 2024 11:00

‘Russia’s Google’ completes $5bn divorce

Yandex Holdings will sell its Russian businesses to a consortium of private investors, the company has announced
‘Russia’s Google’ completes $5bn divorce

Yandex NV, the Dutch-registered parent company of the Yandex group, has reached an agreement to sell its Russian business, including the country’s most popular search engine, to a consortium of private investors, according to a statement released by the company on Monday.

The tech giant, which is often referred to as “Russia’s Google,” will sell its Russian operations in a deal worth 475 billion rubles ($5.2 billion), which will be payable in a combination of cash and shares of the parent company, and spin off its main international projects, the company said.

According to the statement, the sale price “reflects a mandatory discount of at least 50% to fair value” under the Russian law that covers divestment procedures for foreign companies departing the country.

“Under the terms of the proposed transaction, Yandex NV will sell its entire interest in IJSC Yandex, an international joint stock company incorporated in Russia that will hold all of Yandex’s assets and operations in Russia and certain international markets,” the statement said.

The group of investors, which is led by the management of the company will get stakes in Yandex International PJSC, which was registered in Russia’s Kaliningrad special economic zone late last year.

“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,” Chairman John Boynton said in a statement.

Yandex’s Russian business will be owned by a consortium including members of the company’s senior management and Russia’s largest private oil company Lukoil, while the Dutch company will rebrand and retain control of several internationally-focused businesses run by former Yandex executives.

The group of buyers includes businessman Aleksandr Chahava, the owner of My.Games, Pavel Prass, who owns a specialized depositary in Russia, and Alexander Ryazanov, a businessman and former top executive at Gazprom.

According to the company, none of the members will have a controlling stake in the consortium. Yandex’s management will get the largest stake in the Russian business, while Lukoil will hold 10%, the oil major revealed on Monday.

The Russian branch accounted for more than 95% of the Yandex group’s consolidated revenues in the first nine months of 2023, and also roughly the same share of its consolidated assets and employees.

Yandex will retain the businesses, services, and assets of the Yandex NV group with the exception of foreign startups and a data center in Finland.

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