Russian tech giant reaches $5 billion deal to leave Russia
The parent company of Russia's leading technology company, Yandex, said it has agreed to sell all its assets in the country for about $5 billion, which would be one of the biggest corporate exits from Russia since the invasion of Ukraine.
The invasion had thrown Yandex – often referred to as “Russian Google” – into turmoil, turning its attempts to navigate between the Kremlin's authoritarian policies and a Western blockade of Russia's economy into the most dramatic example of the impact of the war on the country's once-vaunted technology. sector.
The agreement announced on Monday came after eighteen months of negotiations. It is an attempt by some company executives to protect Yandex's new generation of companies from the consequences of the war and gain relief from European sanctions.
Under the terms, Yandex's Netherlands-registered parent company, known as YNV, would sell all its Russia-based businesses, which accounted for 95 percent of sales between January and September last year, to a group of Yandex executives and Russia-linked investors. . The businesses for sale represent the majority of the company's assets and employ the majority of its 26,000 employees.
Assets include a popular internet browser and Russia's top food delivery and taxi ride-hailing apps. After the sale, YNV would retain control of four smaller subsidiaries focused on artificial intelligence, which already operate outside Russia. The new entity would employ about 1,300 people, including about 1,000 technology specialists, most of whom are Russian.
YNV's chairman said in a statement on Monday that the sale would allow the AI companies – which develop technologies such as self-driving cars, cloud computing and machine learning – to grow under a new owner with no ties to Russia.
The buyers would pay in shares and cash – in Chinese yuan transferred outside Russia – in a deal worth about $5.2 billion at today's prices. That value represents roughly half of Yandex's current market capitalization, a reflection of the steep discounts the Kremlin has imposed to punish companies that have tried to leave the country and are based in countries the Kremlin considers unfriendly.
Western-based companies have faced extreme hurdles in their efforts to leave Russia over the past two years. Russian authorities must approve buyers, prices and terms, often forcing departing companies to sell at retail prices.
The deal is subject to Russian government approval and must be acceptable to European regulators. Yandex said it expected the first phase of sales to take place by the middle of this year.
Aleksei L. Kudrin, Russia's top government auditor and longtime confidant of President Vladimir V. Putin, became an official adviser to Yandex's Russian companies in December 2022, a move widely seen as an effort to win government support for the restructuring plan.
“For us it is important that the company continues to operate in our country,” Kremlin spokesman Dmitry S. Peskov told reporters on Monday, referring to Yandex. If the deal is approved, “the company's Russian management would remain the largest owner – that is also important,” he said, adding that he could not comment on the details of the company negotiations.
Several Western-based companies, including Danish brewer Carlsberg and German energy company Uniper, had announced the sale of their Russian assets to local buyers, but the deals were thwarted by the Kremlin.
The buyers of Russia's most recognizable tech company include no prominent members of the country's business elite, a reflection of YNV's difficult task of finding investors with deep enough pockets but without direct ties to the Russian government or sanctioned officials and oligarchs .
The group of buyers is led by part of Yandex's Russian management team, including technology entrepreneur Alexander Chachava and an investment fund owned by Russia's largest private oil company Lukoil. YNV said none of the buyers are under Western sanctions and will not be allowed to sell or transfer their shares for a year after the deal is completed. These conditions are intended to allay Western concerns that the deal could ultimately benefit Kremlin insiders.
After the invasion of Ukraine, at least three senior Yandex executives publicly condemned the war and became among the most prominent Russian businessmen to break the government line. Thousands of company employees left the country after the invasion, often to continue working remotely.
However, the anti-war statements have not protected the company from Western reactions. The European Union has sanctioned Yandex founder Arkady Volosh and his then-deputy general manager Tigran Khudaverdyan for enabling Russia's war effort, forcing them to resign from the company to reduce access to Western financial maintain services.
The European Union said Yandex's news aggregation service had blocked anti-war content at the time, essentially enabling Russian propaganda. The company said it had no choice but to comply with strict Russian censorship laws and has since sold the news aggregation service.
Mr Volozh has called the sanctions against him “misplaced”.
“The Russian invasion of Ukraine is barbaric, and I am categorically against it,” said Mr. Volozh in a statement in August. “I must take my share of responsibility for the country's actions,” he said, without giving further details.
After sanctions, Mr. Volosh cut formal ties with YNV, but he still owns about 8 percent of the company's shares.
Paul Sonne contributed to this article.