Yandex split nears completion as Russian traders finalise share exchange

(Reuters) – Russian traders have finalised a share exchange for investors in Yandex (NASDAQ:), often dubbed Russia’s Google (NASDAQ:), one of the final steps needed to complete a more than $5 billion deal that will see local investors take control of the bulk of the technology company’s business.

A consortium of Russian investors is leading a buyout of Yandex from its Dutch parent company Yandex NV after months of negotiations, with the parent selling its assets in Russia at a heavily discounted price due to Kremlin demands on foreign asset sales.

The deal, the largest by a Western-held company to exit Russia since the start of the war in Ukraine, will see Yandex’s Russia-based businesses, which generate more than 95% of revenue and include search, advertising, e-commerce and ride hailing, acquired by the Russian investors.

Smaller business units in cloud, data solutions, self-driving cars and education technology will be developed internationally by Yandex NV.

Yandex’s Nasdaq shares were suspended shortly after Moscow invaded Ukraine in February 2022, and so the deal will allow Russian investors to trade the stock again, while foreign investors hope to salvage something from the international assets.

Russia’s two main bourses, Moscow Exchange and SPB Exchange, said late on Tuesday a voluntary exchange for investors to convert their Yandex NV shares into shares in the new Russian entity, MKPAO Yandex, had been completed.

Moscow Exchange said it had exchanged 42.4 million shares worth a total of 180.3 billion roubles ($2.06 billion) across thousands of transactions carried out by 99 brokerages. It was not clear how Moscow Exchange calculated the value of shares.

MKPAO Yandex listed on Moscow Exchange in April and its shares will begin trading on July 24.

SPB Exchange said it had completed the settlement of the share exchange for 1.42 million shares purchased through its bourse.

In early July, the buyer, Consortium.First, said it had received bids to exchange 43.9 million out of an eligible 50.0 million shares.

A consortium representative said the figure of 43.9 million represented an estimated 99% of eligible Yandex NV shares that were not held in so-called type C accounts.

The assets of many foreign investors, including both individuals and major U.S. investment funds, have been effectively blocked in type-C accounts since Russia invaded Ukraine in February 2022 and was hit by Western sanctions.

Assets in these accounts cannot be transferred out of Russia without permission from Russian authorities.

($1 = 87.5000 roubles)