Yandex N.V., often dubbed as the “Google of Russia,” has finalized a deal to divest its remaining Russian businesses for approximately $5.2 billion, about half of its current market value. This strategic move comes as the company seeks to navigate the complex geopolitical landscape following Russia’s invasion of Ukraine two years ago. The transaction encompasses Yandex N.V.’s ventures in Russia and some neighboring markets, totaling a sale value of around 475 billion rubles.
This significant markdown is attributed to Russian regulations demanding a “mandatory discount” for sales of Russian assets by entities from countries labeled as “unfriendly” by Russia, which includes the Netherlands where Yandex N.V. is incorporated. Established in 1997, Yandex has expanded beyond its search engine roots to offer a wide range of internet services similar to those provided by Google, including e-commerce, digital advertising, maps, and transportation solutions.
Despite achieving a market cap high of $31 billion in November 2021, Yandex’s valuation suffered a sharp decline following the onset of the Ukraine conflict. The Nasdaq’s subsequent suspension and delisting of Yandex, among other Russian-affiliated companies, further impacted the company’s standing.
In the wake of these challenges, Yandex has been actively restructuring and divesting certain assets to mitigate the effects of international sanctions and the departure of key executives, including CEO and founder Arkady Volozh due to EU sanctions. Recent divestitures include its news service and a comprehensive corporate restructuring to sever its Russian ties.
Following the completion of this sale, Yandex N.V. plans to rebrand and distance itself from the Yandex name, which will remain with the new Russian proprietors. The company has indicated its intention to develop new branding for its international businesses and will seek shareholder approval for a legal name change in the near future.
This sale marks a pivotal moment for Yandex, illustrating the profound impact of geopolitical tensions on the global tech landscape. The divestiture not only reflects Yandex’s strategic pivot away from its Russian operations but also underscores the challenges and opportunities for tech companies navigating international sanctions and political unrest. As Yandex embarks on this new chapter, its rebranding efforts and the redirection of its business focus signify a bold move towards adapting to the evolving digital economy.
