Yandex search engine sold in $5.2 billion deal

Yandex, N.V. has agreed to sell its Russian assets – including the Yandex search engine – as part of a deal worth 475 billion rubles (roughly $5.2 billion).

Reports of a coming sale emerged in November. The sale still will need regulatory and shareholder approval.

About the sale. Yandex N.V., the Dutch parent company of the Yandex Group, agreed to sell all of its Russia-based assets, including Search, to a consortium made up of:

• Members of the senior management team of its Russian businesses.
• Russia-based PJSC Lukoil Oil Co.
• Russian entrepreneurs Alexander Chachava, Pavel Prass and Alexander Ryazanov.

The sale could have been for twice the amount, if not for a “mandatory discount,” as TechCrunch reported:

• “The reason for this markdown is due to a rule imposed by the Russian Government, which stipulates that any sale of Russian assets by parent companies incorporated in countries deemed ‘unfriendly’ by Russia, will be subject to a ‘mandatory discount’ of at least 50 percent. And the Netherlands, as a member of an EU bloc that has imposed sanctions on Russia, falls into that ‘unfriendly’ category.

Reason for the sale. Russia’s invasion of Ukraine in February 2022 created significant turmoil for Yandex (or “exceptional challenges” as the Yandex press release put it). This included Nasdaq suspending trading of Yandex shares, sales of various divisions, and financial losses.

Future of Yandex. Yandex management told its Russian employees that the company will “remain independent,” Reuters reported.

Why we care. Yandex Search (often called “the Google of Russia”) is used by more than 60% of Russians and is the dominant advertising platform. For any search marketers who may operate in the market (or might in the future) it will be worth watching whether this ownership change results in any significant changes to Yandex Search.