Russian tech company Yandex has announced that it has received one of the necessary approvals from the Russian government for its planned restructuring. The company, listed on the Nasdaq, has been working on the restructuring for months in order to maintain access to Western markets amid sanctions against Moscow over its invasion of Ukraine. The restructuring is expected to entail the sale of Yandex’s main revenue-generating Russian businesses, while developing other business lines internationally. However, the fear of losing top technology talent is preventing the Kremlin from nationalizing Yandex.
Despite reporting a 33% drop in third-quarter adjusted net income, Yandex remains committed to completing the restructuring and divesting all its Russia-based businesses. The company’s board has now obtained consent from class A shareholders for the merger of certain intermediate Dutch holding companies into Yandex NV. One of the required approvals for the restructuring has also been granted by the government commission for control over foreign investments. However, deals involving foreign asset sales in Russia require government approval, which includes a demand for a 50% discount on the sale and a contribution to the federal budget of at least 10% of the sale price.
Yandex plans to present a restructuring proposal to shareholders for approval by the end of 2023. This move is crucial for the company to ensure its businesses maintain access to Western markets amid ongoing geopolitical tensions. Yandex, often referred to as “Russia’s Google,” is navigating the complexities of the Russian government’s control over foreign investments and its reluctance to nationalize the company to prevent a potential brain drain in the tech industry. The successful completion of the restructuring will allow Yandex to pursue international growth and expand its presence beyond Russia’s borders.
