Technology giant Yandex on Monday announced long-awaited plans to split its Russian and international units in a corporate divorce worth $5.2 billion.
The deal marks an end to more than two decades of Western investment in Yandex, which for years was seen as a darling of Russia’s fast-growing tech industry and an example of successful Western investment in Russia.
But after Moscow sent troops into Ukraine in February 2022, the company’s status as an internationally headquartered firm with a foreign stock market listing became untenable.
The Netherlands-based holding company, Yandex N.V., said it “entered a definitive agreement… to sell all of the Yandex group’s businesses in Russia and certain international markets.”
It will sell those branches, which make up 95 percent of total revenues, assets and employees, to a consortium of local investors in a deal worth 475 billion rubles ($5.2 billion).
The deal is one of the largest among the spate of corporate exits since Moscow ordered troops into Ukraine.
Initially known as “Russia’s Google”, Yandex grew to become Russia’s most successful technology company and a major player in everything from online search and advertising to taxis and food delivery.
The company, which is listed on the US-based Nasdaq exchange, has been mulling some form of corporate break-up for more than 18 months.
The buyers include a group of the company’s senior managers and a fund owned by oil company Lukoil.
The Netherlands-based holding company will retain a small chunk of Yandex’s international-focused business lines, including AI cloud and data platforms, and self-driving technologies.
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Andrei Volna, a 61-year-old medical professional from Moscow, moved to Ukraine with his wife and three children to use his skills and help the locals.
Yandex Chairman John Boynton said the deal, which needs final approval by shareholders, was the “best possible solution for our shareholders, our teams and our users in these extraordinary circumstances.”
The company’s future was thrown into doubt by Moscow’s offensive on Ukraine and the barrage of sanctions Western countries levied on Russia’s economy.
The Kremlin welcomed the proposed deal.
“Yandex is a national technology champion. For us, it is of course important that the company continues to work in the country,” Kremlin spokesman Dmitry Peskov told reporters.