Russian-language large-scale search and portal Yandex is to be sold to a Russian investor group. Dutch parent company Yandex NV, the actual controller of Yandex, announced today that it has reached a $5.21 billion deal to sell most of its Russian operations to a consortium led by investors with ties to Russian oil giant Lukoil.
Under the terms of the deal, a new investment fund, Consortium.First, will acquire Yandex's leading search, advertising, ride-hailing and other services, which generate more than 95% of Yandex's revenue. It marks Russia's largest corporate exit since its invasion of Ukraine in early 2022.
Yandex has been seeking to disassociate itself from Western investors and partners amid rising tensions. Given Yandex’s importance as a national strategic asset, the Russian government has also been pushing to bring it fully under domestic control.
The cash and stock deal values Yandex's total market capitalization at about $10.2 billion, according to Moscow Exchange data. As part of the deal, Yandex NV will receive $5.21 billion in cash and stock. Although below the company's valuation, the sale price reflects the mandatory discount required by the Russian government on the sale of foreign assets.
John Boynton, chairman of the board of directors of Yandex NV, said in a statement:
The proposed transaction will enable shareholders to recover a portion of the value of our divested businesses, while unlocking new growth potential for our international operations that will be retained and enabling the divested businesses to operate under new ownership.
After the Russian army invaded Ukraine, most companies such as Microsoft and Apple announced that they would stop selling new products in Russia. Subsequently, Russia found a way around Western sanctions and allowed "parallel" imports of products. This allows Russians to import goods regardless of whether they have permission from the rights holder.
The agreement aims to keep Yandex’s main operations within Russia while facilitating its exit from Western circles. It remains to be seen whether Yandex can maintain its independence under the new domestic ownership structure.