The Dutch holding company of Russian internet major Yandex is considering selling all of its Russian assets, rather than just a controlling stake. A decision on a possible deal is due in December.
By bne IntelliNews November 16, 2023
The Dutch holding company of Russian internet major Yandex is considering selling all of its Russian assets, rather than a controlling stake as discussed previously, Reuters reports citing unnamed sources.
As followed by bne IntelliNews, Yandex, Russia's internet giant and most valuable tech company, is undergoing a split between its foreign and domestic assets to minimise sanction risks following Russia's full-scale military invasion of Ukraine.
Reportedly, the parties involved in the Yandex split are racing to complete the deal in December 2023. Dutch-based Yandex NV may sell 100% of a holding company set up in Russia's Kaliningrad region, or the so-called special economic zone domestic offshore, sources told Reuters.
Under this scenario Yandex NV would “make a clean break with Russia”, sources said. The total value of the deal is reportedly at RUB560bn ($6.2bn), after the mandatory 50% Kremlin-imposed discount for foreign exit deals.
Latest reports suggested that the deal to split Yandex could indeed be completed by the end of 2023, with a seven-investor consortium potentially getting 7.28% in the Russian part of the company (total of 50.96%).
The deal discussed between the company and the government was previously mediated by ex-finance minister and veteran policymaker Alexei Kudrin. But the deal has reportedly been much delayed due to the US sanctions against Kudrin and anti-war statements of Yandex founder Arkady Voloz.
Now the deal is said to move ahead with Kudrin pushed aside, with no clarity on whether he is still slated to succeed Volozh and get an equity stake in Yandex. The restructured part of Russian Yandex will reportedly be managed by the investors and the new board, and not Kudrin and his team.
As for Volozh, previous unconfirmed reports claimed that his anti-war statements will shave at least $150mn from his proceeds for the Yandex deal. The latest report by Forbes also claimed that the foreign part of Yandex could receive much less IP than previously expected (international businesses of driverless cars, educational services, cloud and data management technologies).
Volozh's family trust (45.1%) and the company's board members, managers and employees (6.6%) were the main owners of the voting shares. However, the Volozh family trust no longer has any voting rights in the company. In 2022, the trust transferred its voting rights to the company's independent board members, according to a spokesperson for the family.
The state Public Interest Fund established in 2019 controls a "golden share" in the company. It is understood that the PIF will drop down to the Russian entity as a result of the restructuring.
Prior to Russia's military invasion of Ukraine, Yandex was hailed as an up and coming global technological group, looking to boost the monetisation of its technologies on the one hand and leverage these technologies to support its international expansion on the other.
Apart from e-commerce, its investment case previously rested on developments in transportation, fintech and foodtech, with the developed ecosystem seen as a key advantage. Yandex was Russia’s leading developer of AI and driverless technologies.
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