The firm behind the company that’s most commonly known as “Russia’s Google” is looking to get out of the whole ‘Russian’ aspect of its business.
Catch-up: Like several non-Western nations, Russia has its own websites that mirror more globally popular ones like Yandex (Russian Google) or VK (Russian Facebook). Even before invading Ukraine, Russia had set into motion a plan to devise its own internet.
- This separation has been accelerated by Western companies pulling out of Russia after it invaded Ukraine, and the Kremlin moving to ban more foreign websites and apps.
What happened: And now, Yandex N.V. (YNV), the parent company of Yandex, is selling its Russian businesses to an investment fund for US$5.2 billion. While the company is technically Dutch, it’s Russian-founded, and its Russian business currently accounts for ~95% of its revenue.
- Services included in the deal include the country’s most popular web browser and a food delivery app. Not included in the deal are four of YNV’s AI-focused subsidiaries.
- Yandex’s exit could hurt Russia’s tech sector, but in exchange for tightening Russia’s grip on the web, as Yandex’s new owners likely have close Kremlin ties.
Big picture: Since the invasion, over 1,000 companies have ended or significantly curtailed Russian operations, but Yandex’s sale shows how hard it is to leave due to a law in which assets must be priced by a state agency before a sale and cannot be sold for more than half that value.
- While YNV (which sold its Russian biz for half its worth) or Heineken (which sold Russian operations for a single euro) bit the bullet, other companies can’t afford to.
Zoom out: Russian President Vladimir Putin is also moving against companies trying to leave and has signed decrees to seize the Russian assets of several exiting Western brands, like Danish brewer Carlsberg, German energy firm Uniper, and French yogurt giant Danone — yep, he wants those Activia probiotics even more than Jaime Lee Curtis.—QH