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'Russia's Google' Yandex to be sold to domestic investors in $5.2 billion deal

Yandex is set to be sold to a group of Russian investors. Yandex NV, the Dutch parent company of Yandex, announced today that it has reached a $5.21 billion deal to sell most of its Russian operations to a consortium led by investors with ties to Russian oil giant Lukoil.

Under the terms of the deal, a new investment fund, Consortium.First, will acquire Yandex's leading search, advertising, ride-hailing, and other services that generate over 95% of its revenues. This marks the biggest corporate exit from Russia since the country's invasion of Ukraine in early 2022.

Yandex has been seeking to disentangle itself from Western investors and partners amid the worsening tensions. Given its importance as a strategic national asset, the Russian government had also been pushing for Yandex to fall entirely under domestic control.

The cash and stock transaction values Yandex's total market capitalization at approximately $10.2 billion based on the Moscow Exchange. As part of the transaction, Yandex NV will receive $5.21 billion in cash and stock. Although below the company's valuation, the sale price reflects mandatory Russian government discounts for foreign asset sales.

John Boynton, chairman of the board of directors of Yandex NV, said in a statement:

The proposed transaction will allow shareholders to recover some value for the businesses that we are divesting, while unlocking new growth potential for the international businesses we will retain and enabling the divested businesses to operate under new ownership

After the invasion of Ukraine, most companies, such as Microsoft and Apple, announced that they would stop selling new products in Russia. Then, the country found a way to get around Western sanctions by allowing "gray" imports of products. This allowed Russians to import goods regardless of whether or not they had permission from copyright holders to do so.

The deal aims to keep Yandex's main businesses within Russia while facilitating its exit from Western circles. It remains to be seen if Yandex can retain its independence under its new domestic ownership structure.

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