by The parent company of Russia’s most prominent technology company, Yandex, said it agreed to sell all its assets in the country for about $5 billion, which would be one of Russia’s biggest corporate exits since its invasion of Ukraine.
The invasion had rattled Yandex – often referred to as “Russia’s Google” – and made its attempts to navigate between the Kremlin’s authoritarian policies and a Western blockade of the Russian economy the most dramatic example of the war’s impact on the country’s once vaunted technology industry. sector.
The deal announced on monday It came after 18 months of negotiations. It is an attempt by some of the company’s executives to protect the new generation of Yandex businesses from the consequences of the war and possible sanctions.
Under its terms, Yandex’s Dutch-registered parent company, known as YNV, would sell all of its Russia-based businesses, which accounted for 95 percent of its revenue between January and September last year, to a group of managers. from Yandex and investors connected to Russia. . The companies for sale represent the majority of the company’s assets and employ most of its 26,000 employees.
Assets include a popular internet browser and Russia’s leading taxi and food delivery apps. Following 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 them Russian.
YNV’s chairman said in a statement on Monday that the sale would allow the artificial intelligence businesses, which develop technologies such as self-driving cars, cloud computing and machine learning, to grow under new owners unrelated to Russia.
Buyers would pay in shares and cash (in Chinese yuan transferred out of Russia) in a deal valued at around $5.2 billion at current prices. That value represents about 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 hostile.
Western-based companies have faced extreme obstacles in their attempts to exit Russia over the past two years. Russian authorities must approve buyers, prices and conditions, often forcing outgoing companies to sell at fire-sale prices.
The deal is subject to Russian government approval and must be acceptable to European regulators. Yandex said it expected the first stage of the sale to take place by mid-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 businesses in December 2022, a move widely seen as an attempt to gain the government support for the restructuring plan.
“It is important for us that the company continues to operate within our country,” Kremlin spokesman Dmitri S. Peskov told reporters on Monday, referring to Yandex. If the deal is approved, “the Russian management of the company will remain the largest owner; that is also important,” he said, adding that he cannot comment on the details of the corporate negotiations.
Several Western companies, including Danish brewer Carlsberg and German power company Uniper, had announced the sale of their Russian assets to local buyers, only for the Kremlin to thwart the deals.
The buyers of Russia’s most recognizable technology company do not include any 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 connections to the Russian government or officials and oligarchs. sanctioned.
The group of buyers is led by some members of Yandex’s Russian management team and includes 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 are not allowed to sell or transfer their stakes for a year after completing the deal. These conditions are intended to address Western concerns that the deal could ultimately benefit Kremlin insiders.
After the invasion of Ukraine, at least three top Yandex executives publicly condemned the war, becoming some of the most prominent Russian businessmen to break with the government line. Thousands of company employees left the country after the invasion, often to continue working remotely.
The anti-war statements, however, have not protected the company from Western reaction. The European Union has sanctioned Yandex founder Arkady Volozh and his deputy chief executive at the time, Tigran Khudaverdyan, for enabling Russia’s war effort, forcing them to resign from the company to maintain their access to Western financial services.
The European Union said the Yandex news aggregation service at the time had blocked anti-war content, effectively allowing Russian propaganda. The company said it had no choice but to comply with Russia’s strict censorship laws and has since sold the news aggregation service.
Volozh has called the sanctions against him “wrong.”
“The Russian invasion of Ukraine is barbaric and I am categorically against it,” Volozh, who lives in Israel, said in a statement in August. “I have to take my share of responsibility for the country’s actions,” he said, without offering further details.
After being sanctioned, Volosh cut his formal ties with YNV, but still owns about 8 percent of the company’s shares.
Paul Sonne contributed with reports.
