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Yandex N.V., the Dutch parent company of the Yandex group (“YNV”), entered into a definitive agreement on February 4, 2024 with a purchaser consortium (the “Purchaser”) to sell all of the group’s businesses in Russia and certain international markets (the “Target”) at a valuation of RUB 475 billion (approximately $5.2 billion), subject to adjustments, and payable in a combination of cash and Class A shares of YNV.
We are pleased to announce that the initial closing of the transaction has occurred in accordance with the terms described in YNV’s shareholder circular dated February 8, 2024. At this first closing, YNV has sold approximately 68% of the Target. Following such closing and the earlier cash sale of a 3.7% stake in Target to a subsidiary of Target for use under its equity incentive program, YNV now holds a remaining minority interest of approximately 28%. In the coming days, we intend to publish pro forma financial information for YNV and the retained businesses, giving effect to the divestment.
We expect the second and final closing to occur within seven weeks after the first closing (in the first half of July), at which time YNV will sell its remaining interest in Target. The consideration at the second closing will be paid in a combination of up to 108 million Class A shares of YNV, with the balance (if any) to be paid in Chinese Yuan outside Russia. Following the second closing, Yandex N.V. will have no interest in the Russian businesses.
In addition, an amendment to our articles of association that was approved by our shareholders in March became effective at the first closing. This amendment significantly simplifies our corporate governance and capital structure – in particular, by eliminating the “priority share” previously held by the Public Interest Foundation, as well as the related rights of that Foundation to appoint two members of our board. Further, four Russian members of our Board have resigned with effect from the first closing. The current members of our Board of Directors are John Boynton (Chairman), Rogier Rijnja, and Charles Ryan. We anticipate that the remaining Board members will propose additional executive and non-executive directors with appropriate international business and technology experience for election to our Board in due course.
The number of Class A shares outstanding will be reduced by the number of shares that we receive as partial consideration in the Sale at each of the first and second closing. The Class A shares received as consideration will be held in treasury, pending use under our equity incentive plans and for further financing purposes. Following the first closing, the aggregate number of Class A and Class B ordinary shares outstanding is 293.9 million.
As we work towards the second closing of this transaction, we are continuing our preparations for the future of the retained group, which will include a portfolio of four international businesses (Nebius AI, Toloka AI, Avride, and TripleTen; more information can be found here) and other non-Russian assets (including a cutting-edge data center located in Finland and minority investments in other technology businesses). We expect to provide updates regarding the new senior management team and their strategy for the retained business in the coming months. We also expect to introduce a new brand for the retained group and to ask our shareholders to approve a change in the legal name of our company, in due course. The Yandex brand will continue to be used by the Target group being sold.
Trading in our Class A shares currently remains halted on Nasdaq. Although we can provide no assurance, we are hopeful that trading may resume following the successful completion of the divestment. We have applied to terminate the listing of our Class A shares on the Moscow Exchange, which will become effective on July 10, 2024.
Following the sale, YNV intends to retain a portion of the net cash consideration (after adjustments, applicable taxes, and other expenses) to finance the development of the retained international businesses. YNV expects ultimately to return a significant proportion of the remaining net proceeds to our remaining shareholders, likely through a share repurchase offer. Any decision regarding the timing and amount of such a return of capital to shareholders will be made following the second closing and after the initial claims period under the purchase agreement, likely towards the end of the year.