MOSCOW, June 23, 2020 (GLOBE NEWSWIRE) -- Yandex (NASDAQ and MOEX: YNDX), one of Europe's largest internet companies and the leading search and ride-hailing provider in Russia, announces that it has entered into a binding agreement with Sberbank to reorganize their two Joint Ventures - Yandex.Market and Yandex.Money. As a result of this transaction, Yandex will become the controlling shareholder in Yandex.Market, while simultaneously exiting the Yandex.Money joint venture.
Tigran Khudaverdyan, Deputy CEO of Yandex , commented:
"We see great strategic potential in the full integration of e-commerce services into the Yandex ecosystem, unlocking significant synergies between Yandex.Market and other Yandex services. We aim to make Yandex.Market one of the leading e-commerce players in Russia, by significantly expanding its assortment, making ordering quick and easy, ensuring faster delivery times, and leveraging our existing logistics infrastructure, as well as our technological knowhow.''
Greg Abovsky, COO and CFO of Yandex, added:
"We are grateful to Sberbank for their expertise and productive cooperation, which was instrumental in supporting Yandex.Market's successful development over the last two years. Given the great potential for further growth of e-commerce in Russia, we believe now is the right time for us to fully consolidate operating control over Yandex.Market and accelerate our e-commerce strategy. At the same time, by exiting the Yandex.Money Joint Venture, we enhance our strategic flexibility with respect to opportunities in payments and financial services. The equity offering we are separately announcing today will give us the firepower we need to build one of the leading e-commerce players in Russia, while also maintaining the flexibility to pursue other strategic opportunities.''
Yandex and Sberbank have entered into a binding agreement to reorganize two of their JVs, Yandex.Market and Yandex.Money. Post-closing, Yandex will own 100% of Yandex.Market, with an equity incentive pool set aside for Yandex.Market management. Sberbank will gain 100% ownership of Yandex.Money. Yandex.Money service will be rebranded by the end of 2020. Yandex and Sberbank will each continue to provide certain transition services to Yandex.Money and Yandex.Market, respectively, for a period of time following completion.
Under the terms of the transaction, Sberbank will sell all of its shares in Yandex.Market (45%) to Yandex for a cash consideration of RUB 42 billion (based on the implied equity valuation of the business of RUB 87.3 billion). At the same time, Yandex will sell its participatory interest in Yandex.Money (25% plus one ruble) to Sberbank for approximately RUB 2.4 billion.
The transactions have been approved by the Board of Directors of Yandex and the Sberbank Executive Board. The Yandex.Market transaction is subject to antitrust approvals. The transactions are expected to close in the third quarter of 2020.
Following the completion of the transaction, Yandex.Market will be a wholly owned subsidiary of Yandex NV and will be consolidated in Yandex NV's financial results from the date of completion.
Upon completion of the transaction, any e-commerce and financial services non-compete obligations between Yandex and Sberbank will be terminated. Maxim Grishakov will remain Chief Executive Officer of Yandex.Market. The price comparison service and marketplace will continue to operate without any changes for our users or merchant partners.
Over time, the deeper integration of Yandex.Market with other complementary services within the Yandex ecosystem will allow us to enhance the functionality and user experience across our platforms.
The Russian e-commerce market is in its early days and has significant long-term growth potential underpinned by an accelerating shift from offline to online in the retail sector. We are entering into the transaction at an opportune time to capitalize on these secular trends and establish a firm foothold in Russia's highly attractive e-commerce landscape. We believe that deeper integration of Yandex.Market within the Yandex ecosystem will help to unlock significant synergies with various Yandex services in order to accelerate the path to profitability for Yandex.Market. Our goal is to leverage the breadth of the Yandex digital ecosystem to build one of the leading domestic e-commerce players in Russia. The transaction is also aligned with our previously communicated plan to increase ownership and gain operating control of key strategic assets.
Conference call information
Yandex will hold an investor conference call tomorrow (June 24, 2020) to discuss the transaction and Yandex.Market strategy at 8:00 AM U.S. Eastern Time (3:00 PM Moscow time; 1:00 PM London time). We will distribute dial-in details ahead of the call.
This press release contains forward looking statements within the meaning of Section 27a of the Securities Act of 1933, as amended, and Section 21e of the Securities Exchange Act of 1934, as amended, including statements regarding the expected timing, effects, costs and anticipated benefits of our proposed transactions with Sberbank, our expectations with respect to the growth of ecommerce in Russia and other statements identified by words such as "could", "expects", "intends", "may", "plans", "potential", "should", "will", "would", or similar expressions and the negatives of those terms. Forward-looking statements are not promises or guarantees of future performance, and are subject to a variety of risks and uncertainties, many of which are beyond our control, and which could cause actual results to differ materially from those contemplated in such forward-looking statements. The potential risks and uncertainties that could cause actual results to differ from the results predicted or implied by such statements include, among others, the risks related to satisfying the conditions to closing the transactions, including timing and regulatory approvals, macroeconomic and geopolitical developments affecting the Russian economy or our business, changes in the political, legal and/or regulatory environment, competitive pressures, changes in advertising patterns, changes in user preferences, technological developments, and our need to expend capital to accommodate the growth of the business, as well as those risks and uncertainties included under the captions "Risk Factors" in our Annual Report on Form 20-F for the year ended December 31, 2019.
Yandex (NASDAQ and MOEX:YNDX) is a technology company that builds intelligent products and services powered by machine learning. Our goal is to help consumers and businesses better navigate the online and offline world. Since 1997, we have delivered world-class, locally relevant search and information services. Additionally, we have developed market-leading on-demand transportation services, navigation products and other mobile applications for millions of consumers across the globe. Yandex, which has 36 offices worldwide, has been listed on the NASDAQ since 2011.
More information on Yandex can be found at https://yandex.com/company/.
Contacts:Investor RelationsYulia GerasimovaPhone: +7 495 974-35-38E-mail: askIR@yandex-team.ru
Press Office:Ilya GrabovskiyPhone: +7 495 739-70-00E-mail: firstname.lastname@example.org