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Yandex NV ( YNDX ) completes divestment of Russian assets

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Cash and shares deal valued at around $5.4 bln

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Retained businesses to come under new Nebius Group

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Yandex ( YNDX ) co-founder Volozh to become Nebius CEO, says source

(Adds bullets, detail in paragraphs 7-8, 10-13, 16-18)

By Alexander Marrow

July 15 (Reuters) - A deal to split the assets of

Russian technology company Yandex ( YNDX ) was finalised on

Monday, with a Russian consortium of investors buying the bulk

of Yandex's ( YNDX ) businesses in a cash and shares deal worth around

$5.4 billion.

The split marks the end of foreign ownership in Yandex ( YNDX ),

often dubbed "Russia's Google", potentially tightening the

Kremlin's control of the internet space in Russia, while also

finalising the largest corporate exit from Russia since Moscow

invaded Ukraine over two years ago.

Yandex's ( YNDX ) Dutch parent company Yandex NV ( YNDX ) said it had

sold its remaining minority 28% stake as part of the deal's

second closing, receiving a total of $2.8 billion in cash and

162.5 million YNV class A shares.

"With the second closing, YNV has received the agreed upon

purchase price and now fully disposed of its remaining interest

in the Russian businesses," YNV said.

Yandex ( YNDX ) blazed a trail for Russian technology after setting

up in the late 1990s dotcom boom and listing on Nasdaq, becoming

a dominant force in search and advertising, ride-hailing,

e-commerce and other online services.

Four AI-focused businesses in cloud, data labelling,

self-driving cars and education technology are being retained by

YNV and will be developed under the Nebius Group name, YNV said.

Yandex ( YNDX ) in Russia said YNV would stop using Yandex brands by

July 31.

VOLOZH RETURNS

The deal is the result of around two years of negotiations

and faced various setbacks and hurdles, from Kremlin demands for

a discount of at least 50% on foreign asset sales to

nationalisation risk and an anti-war outburst from Yandex ( YNDX )

co-founder Arkady Volozh.

After EU sanctions on Volozh were lifted in March, he is now

set to return as CEO of Nebius and lead the renamed group, now

free from the shackles of its Russia ties, a person familiar

with the matter told Reuters.

YNV Chairman John Boynton thanked the company's 1,300

employees, paying particular tribute to Vadim Marchuk, who led

the deal team.

"All connections with Russia have now been severed," he

said.

With the deal done, attention may turn to the future of

YNV's Nasdaq listing, where many Western shareholders are stuck

holding stakes in which trading has long been suspended.

"The Class A shares received as consideration will be held

in treasury, pending use under our equity incentive plans and

for further financing purposes," YNV said.

Following the deal's closing, YNV said the aggregate number

of Class A and Class B ordinary shares outstanding was 199

million.

Trading in Yandex ( YNDX ) in Russia under the new YDEX ticker will

start on July 24.

The Russian buyers said on Monday that all settlements for a

share exchange, converting Moscow-listed shares in Yandex NV ( YNDX ) to

the new Russian entity, MKPAO Yandex, had been completed.

But the new owners face the headache of a lawsuit filed by

around 100 shareholders, accusing the consortium's trustee,

Solid Management, of imposing discriminatory terms in the

exchange of shares.