Dutch owner of Russia's No. 1 search engine Yandex sells for $5.2 billion, exits country

Feb. 6 (UPI) -- The Dutch parent company of top Russian Internet search engine Yandex said it has sold the business to a special purpose Russian mutual fund at a heavily discounted $5.2 billion and is pulling out of the country completely.

The sale to Consortium.First, under the management of a group led by former Yandex Russia senior management team members, was at a near 50% discount of Yandex's $10.2 billion market value in line with Russian government rules on the sale of companies incorporated in "unfriendly" countries, Yandex NV said Monday in a news release.

Completion of the transaction, the biggest pullout of a Western company since Russia's invasion of Ukraine two years ago, is pending approval by an extraordinary meeting of shareholders of the company -- listed on the NASDAQ and Moscow exchanges as well as European bourses -- at an as yet-to-be-announced date.

The deal, which includes ceding the Yandex brand name, will see Yandex NV apply to delist from the Moscow Exchange with the new owners expected to obtain public status and a new listing on the bourse.

"Since February 2022, the Yandex group and our team have faced exceptional challenges. We believe that we have found the best possible solution for our shareholders, our teams and our users in these extraordinary circumstances," said chairman John Boynton.

"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."

Boynton added that the sale would allow both parts of the current group to develop and grow "for the benefit of their stakeholders."

Russia's number one search engine, seen by Moscow as a critical part of its information infrastructure, has previously been accused of withholding negative information about the Ukraine war from the Russian public, according to the BBC.

Moscow, which had been looking for ways to secure Yandex's presence in the country amid an exodus of Western firms and co-founder Arkady Volozh becoming a vocal critic of the war, welcomed the deal.

"This is exactly what we wanted to achieve a few years ago when Yandex was under threat of being taken over by Western IT giants," said Anton Gorelkin, deputy head of the Russian parliament's committee on information policy.

"Yandex is more than a company, it is an asset of the entire Russian society," Gorelkin added.

Volozh is engaged in a legal battle to get European Union sanctions lifted after he was accused of prioritizing "official state media and narratives in Yandex search results, and de-ranking and removing content critical of the Kremlin, such as content related to Russia's war of aggression against Ukraine".

However, he quit Yandex in 2022.

The company stressed Monday that the deal was in full compliance with international sanctions and that no purchase consortium members were a target of, or owned or controlled by a target of, sanctions in the United States, EU, Britain or Switzerland.