Yandex N.V. has reached an agreement to divest its Russian assets, which include the Yandex search engine, in a transaction valued at 475 billion rubles (approximately $5.2 billion).

Speculation about the impending sale first surfaced in November. However, the deal still requires approval from regulators and shareholders.

Details of the transaction. Yandex N.V., the Dutch-based parent entity of the Yandex Group, has agreed to offload all of its Russian operations—including Search—to a consortium comprising:

• Senior executives from its Russian business units.
• PJSC Lukoil Oil Co., a Russian energy giant.
• Entrepreneurs Alexander Chachava, Pavel Prass, and Alexander Ryazanov.

The final price could have potentially been double, had it not been for what TechCrunch described as a “mandatory discount”:

• “This reduction was necessitated by a regulation from the Russian government requiring that any sale of Russian assets by companies incorporated in jurisdictions considered ‘unfriendly’ by Russia must be sold with a minimum 50% discount. The Netherlands, being part of the EU which has sanctioned Russia, is classified as such.

Motivation behind the sale. The Russian invasion of Ukraine in February 2022 led to major disruptions for Yandex (referred to in a press release as “exceptional challenges”). These included Nasdaq halting trading of Yandex shares, the sale of multiple business units, and substantial financial losses.

What’s next for Yandex. According to Reuters, Yandex leadership assured its employees in Russia that the company would continue to operate independently following the sale.

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Why this matters. Yandex Search, often referred to as “Russia’s Google,” is used by over 60% of Russians and serves as the leading advertising platform in the country. For digital marketers active in—or considering entering—theRussian market, it will be important to monitor whether this change in ownership leads to any notable shifts in how Yandex Search operates.

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