Russian tech giant Yandex has agreed a $5.5bn deal to buy Tinkoff, the country’s top online bank, the companies said on Tuesday.
Yandex said it was preparing a cash-and-share offer for all of London-listed Tinkoff’s share capital at a premium of 8 per cent over its share price.
The prospective deal, which is subject to due diligence and a formal offer, will represent a major shake-up of Russia’s tech and banking markets at a time when major state-run companies are encroaching on both sectors.
Yandex, one of the few search engines globally with a higher local market share than Google, has recently made strides in fields ranging from taxis and ecommerce to entertainment.
The growth torpedoed its decade-long partnership with Sberbank, Russia’s largest state bank, whose chief executive Herman Gref is leading a major expansion into a $2bn tech “ecosystem” in most of the same sectors.
After his offer to buy a controlling stake in Yandex in 2018 was rebuffed, Sberbank set up several competing businesses with rival tech companies that made the partnership untenable, and sold its half of their ecommerce joint venture back to Yandex for $600m.
Tinkoff has won plaudits across the industry for its retail focus and tech savvy but struggled to scale its business in recent years while facing deep-pocketed competitors such as Sberbank.
Its founder and largest shareholder, beer and dumpling billionaire Oleg Tinkov, is undergoing treatment in London for leukaemia while awaiting extradition hearings to the US on charges he under-reported his assets by more than $1bn while taking Tinkoff public in 2018.
Mr Tinkoff suggested a merger to Yandex founder Arkady Volozh at a conference in 2019. “The question for Yandex is: are they with Tinkoff or Sber?” Mr Tinkoff said. “If we fully merge with Yandex, then the capitalisation of the united company will be more than $20bn and Sberbank won’t know what hit it, because these two companies have the most talented staff.”
Shares in Tinkoff’s parent company TCS rose more than 7 per cent on the announcement, while Yandex’s shares gained 4.5 per cent.
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