FILE PHOTO: The logo of Russian technology giant Yandex is on display at the company's headquarters in Moscow, Russia December 9, 2022. REUTERS/Evgenia Novozhenina/File Photo
(Reuters) -A deal to split the assets of Russian technology company Yandex was finalised on Monday, with a Russian consortium of investors buying the bulk of Yandex's businesses in a cash and shares deal worth around $5.4 billion.
The split marks the end of foreign ownership in Yandex, often dubbed "Russia's Google", potentially tightening the Kremlin's control of the internet space in Russia, while also finalising the largest corporate exit from Russia since Moscow invaded Ukraine over two years ago.
Yandex's Dutch parent company Yandex NV (YNV) said it had sold its remaining minority 28% stake as part of the deal's second closing, receiving a total of $2.8 billion in cash and 162.5 million YNV class A shares.
"With the second closing, YNV has received the agreed upon purchase price and now fully disposed of its remaining interest in the Russian businesses," YNV said.
Yandex blazed a trail for Russian technology after setting up in the late 1990s dotcom boom and listing on Nasdaq, becoming a dominant force in search and advertising, ride-hailing, e-commerce and other online services.
Four AI-focused businesses in cloud, data labelling, self-driving cars and education technology are being retained by YNV and will be developed under the Nebius Group name, YNV said.
Yandex in Russia said YNV would stop using Yandex brands by July 31.
VOLOZH RETURNS
The deal is the result of around two years of negotiations and faced various setbacks and hurdles, from Kremlin demands for a discount of at least 50% on foreign asset sales to nationalisation risk and an anti-war outburst from Yandex co-founder Arkady Volozh.
After EU sanctions on Volozh were lifted in March, he is now set to return as CEO of Nebius and lead the renamed group, now free from the shackles of its Russia ties, a person familiar with the matter told Reuters.
YNV Chairman John Boynton thanked the company's 1,300 employees, paying particular tribute to Vadim Marchuk, who led the deal team.
"All connections with Russia have now been severed," he said.
With the deal done, attention may turn to the future of YNV's Nasdaq listing, where many Western shareholders are stuck holding stakes in which trading has long been suspended.
"The Class A shares received as consideration will be held in treasury, pending use under our equity incentive plans and for further financing purposes," YNV said.
Following the deal's closing, YNV said the aggregate number of Class A and Class B ordinary shares outstanding was 199 million.
Trading in Yandex in Russia under the new YDEX ticker will start on July 24.
The Russian buyers said on Monday that all settlements for a share exchange, converting Moscow-listed shares in Yandex NV to the new Russian entity, MKPAO Yandex, had been completed.
But the new owners face the headache of a lawsuit filed by around 100 shareholders, accusing the consortium's trustee, Solid Management, of imposing discriminatory terms in the exchange of shares.
(Reporting by Alexander Marrow, Editing by Louise Heavens and David Evans)
