Page 37 - bneMag Dec22

bne December 2022 Cover Story I 37
Russia's invasion of Ukraine has caused a tsunami of M&A deals as Russia’s private companies scramble to restructure their busi- nesses to account for tectonic changes in the business landscape. It has cost everyone a lot of money as owners have been forced to sell off businesses exposed to sanctions or in many cases the leading lights of Russian industry have been forced into early retirement by personal sanctions that have de facto forced them out of the firms they
computing, data labelling, and ed-tech) independently from Russia.
“Divesting Yandex N.V.'s ownership and control of all other businesses in the Yandex Group (including search and advertising, mobility, e-commerce, food-delivery, delivery, entertainment services and others in Russia and inter- national markets), including transfer- ring certain elements of governance to management.”
search engine, to Russian investors. The Russian business is the more valuable and also includes business in advertis- ing, mobility, e-commerce, food delivery and others.
The board of directors also said that Yandex NV will be renamed "in due course", with the divested business keeping exclusive rights for the use of the Yandex brand.
"These are exceptionally challenging
founded. Maybe the biggest victim of all is Yandex, Russia internet giant and the most valuable tech company in Europe.
The company’s market capitalisation has already been halved, costing inves- tors billions of dollars, and the fire sale that is about to start will probably cost them hundreds of millions of dollars more. And that is just the financial cost: Yandex has been a beacon of success
in the modern Russia, a world class company that has out googled Google. The restructuring will rescue a lot of value and create a serious business,
but the dream that a Russian tech firm could not only hold its own in direct competition with the best that America has to offer but even win is being comprehensively destroyed.
Yandex remake
The Netherlands-based parent company Yandex NV announced on November
25 it will divest its Russian assets in
an effort to unblock its Nasdaq listed shares and allow its international share- holders to exit.
The Dutch holding will keep most of the group’s international assets and will be headed by Yandex founder Arkady Volozh, while former finance minister Alexei Kudrin will temporarily head the “Russia Yandex” that will own all the Russia-based businesses and be sold off to local investors.
A special committee of the board was set up to “explore a variety of potential scenarios and steps including:
“Development of the international divisions of certain services (includ- ing self-driving technologies, cloud
The company cited “the current geopolitical environment” as the reason for the changes that would in effect break up not only one of Russia’s most successful tech companies, but the leading tech company in all of Europe. Yandex’s market capitalisation on
the eve of the invasion of the war was $12.7bn, which has halved to $6.7bn as of November 28.
Yandex NV has a total of some 10,000 significant shareholders, most of whom are international portfolio investors, according to bne IntelliNews sources close to the company. Trading in Yandex shares was suspending shortly after
the war in Ukraine started, leaving its shareholders trapped as financial transactions with Russia have been
times," John Boynton, Yandex's chair- man said. "Please be assured that as we analyse different strategic options, we will do everything possible to protect value for our public shareholders and preserve opportunities for the 20,000 employees who have made Yandex one of Europe's most successful technology companies," he said as cited by East West Digital News.
The bne IntelliNews source said that
the restructuring is still at a prelimi- nary stage as many hurdles still need
to be cleared, but the appointment of Kudrin, who is a close personal advisor to Russian President Vladimir Putin,
as a Yandex board member has been taken by observers as indicating that the Kremlin is committed to doing a deal.
“Yandex cited “the current geopolitical environment” as the reason for the changes that would in effect break up the leading tech company in all of Europe”
halted; the Russian National Settlement Depository (NDC), the main custodian, has been sanctioned, blocking its connections with international banks.
Amongst the options being considered is to keep the international divisions of certain services, including the self-driving cars, cloud computing, data labelling and education technol- ogy in the Dutch vehicle Yandex NV "independently from Russia" and sell the Russian assets, including its main
Kudrin is the architect of Russia’s liberal market reform programme and seen as pro-business. It is believed that he will argue that it is in the country’s interests not only to keep Yandex as a privately owned company and to prevent any of the large state-owned enterprises from scooping the company up, but instead for a diversified group of investors that will have the commercial interests of the company at heart and that will also be acceptable to the Russian manage- ment who will be given a free hand to
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