Search engine Yandex exits Russia, sells assets

Alex Omenye
Alex Omenye

The internet firm Yandex NV said that it has reached an agreement to sell all of its Russian assets, including a fund that is ultimately controlled by oil giant Lukoil, for 475 billion rubles ($5.21 billion) in cash and shares.

By signing the transaction, Yandex would permanently lose its control of the largest technological company in the nation—often referred to as “Russia’s Google”—and be permanently cut off from the Western IT circles it had previously been courted.

Before Moscow invaded Ukraine in February 2022, Yandex was regarded as one of the few Russian enterprises with the potential to become a worldwide corporation. Yandex built industry-leading web services, including search, advertising, and ride-hailing.

Yandex NV said that “a mandatory discount of at least 50% to ‘fair value'” is included in the sale price.

Sales of foreign assets require approval from the Russian government, which also requires a minimum 50% discount.

Yandex’s weighted average of its shares on the Moscow Exchange for the last three months was used to compute the company’s market capitalization, which came to $10.2 billion. Before Russia invaded in late 2021, Yandex was valued at close to $30 billion on the market.

Currently, Yandex has a free-float ownership structure with around 88% of its shareholders being Western funds. According to a statement from Yandex NV, the transaction would include up to 176 million Yandex NV Class A shares and the cash equivalent of at least 230 billion roubles.

Yandex NV stated, “The cash consideration will be paid in Chinese Yuan outside of Russia,” and that when the deal was completed, it will stop using the Yandex brand.

A recently established investment vehicle under the trusteeship of Solid Management is the buyer, Consortium.First. It was headed by top personnel from Yandex’s Russian division, with backing from four investors, one of whom being Argonaut, a fund that is ultimately controlled by Lukoil.

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