Yandex N.V., the Dutch parent company of the Russian internet giant Yandex, has announced plans to sell off its remaining Russian businesses at a significant markdown. This decision comes amidst escalating geopolitical pressures following Russia’s invasion of Ukraine two years ago. The sale, valued at around 475 billion rubles ($5.2 billion), reflects a stark 50 percent discount imposed by the Russian Government on assets sold by parent companies incorporated in countries deemed “unfriendly.”
Background
Founded in 1997, Yandex gained prominence as “The Google of Russia,” offering a range of services similar to its American counterpart. However, in the wake of Russia’s military actions in Ukraine, Yandex faced substantial challenges. The company’s shares plummeted, leading to its eventual delisting from the Nasdaq. Additionally, Yandex’s CEO and founder, Arkady Volozh, was ousted following sanctions imposed by the European Union.
The Deal
The transaction will encompass the sale of all Yandex N.V. businesses in Russia and neighboring markets to a consortium led by senior managers from Yandex’s Russian operations. The consortium includes entities such as FMP, Argonaut, Infinity Management, IT.Elaboration, and Meridian-Servis. These businesses represent over 95% of Yandex Group’s revenues, assets, and employee base.
Terms of the Transaction
Breaking down the terms, Yandex N.V. will receive at least 230 billion rubles ($2.5 billion) in cash, to be paid in Chinese Yuan (CNH). The deal is structured to close in two stages, subject to regulatory and shareholder approval:
| Stage | Details |
|---|---|
| First | Yandex N.V. will sell a 68 percent stake of its Russian businesses within the first half of 2024, receiving a mix of cash and shares in the Dutch entity. |
| Second | The second part of the deal is expected to close within seven weeks of the first stage’s completion. |
Remaining Assets
Post-transaction, Yandex N.V. will retain a smaller portfolio of non-Russian assets, including early-stage technology businesses and investments in various technology companies. Notable assets to remain include an autonomous vehicle company, an AI cloud platform, a generative AI and LLM company, and an edtech platform.
Implications and Future Plans
The company plans to utilise a portion of the proceeds from the sale to further develop its remaining businesses and provide returns to its shareholders. Yandex N.V. aims to unlock new growth opportunities for its international businesses while allowing the divested entities to operate under new ownership. The company will seek shareholder approval to change its legal name in due course.
Conclusion
The sale of Yandex N.V.’s remaining Russian businesses at a steep discount underscores the significant impact of geopolitical tensions on multinational corporations. As Yandex prepares to offload its Russian assets, it navigates a challenging landscape shaped by regulatory constraints and geopolitical dynamics, signalling a shift in its corporate strategy towards international expansion and diversification.
This website uses cookies.
