Yandex said it was preparing a cash and stock offering for the entire share capital of Tinkoff, listed in London, with an 8% premium over its share price.
The potential deal, subject to due diligence and a formal offer, will represent a major upheaval in Russia’s technology and banking markets at a time when large state-owned companies encroach on both sectors.
Yandex, one of the few search engines in the world with a higher local market share than Google, has recently made strides in areas ranging from taxis and e-commerce to entertainment.
The growth torpedoed its ten-year partnership with Sberbank, Russia’s largest state-owned bank, whose CEO Herman Gref is leading a major expansion into a $ 2 billion tech “ecosystem” across most of the same industries.
After its offer to buy a controlling stake in Yandex in 2018 was rejected, Sberbank created several competing firms with rival tech companies that made the partnership untenable and sold half of their e-commerce joint venture to Yandex for 600. millions of dollars.
Tinkoff has been applauded across the industry for his focus on retail and his tech savvy, but has struggled to grow his business in recent years in the face of deep-pocketed competitors such as Sberbank.
Its founder and largest shareholder, beer and dumpling billionaire Oleg Tinkov, is undergoing treatment in London for leukemia pending extradition hearings to the United States for under-reporting his assets by over $ 1 billion. dollars when Tinkoff took possession 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?” Said Mr. Tinkoff. “If we merge fully with Yandex, the capitalization of the united company will be over $ 20 billion and Sberbank will not know what hit it because these two companies have the most talented staff.”
Shares of parent company Tinkoff TCS rose more than 7 percent on the announcement, while shares of Yandex gained 4.5 percent.