Russian online bank Tinkoff withdraws from sale of Yandex for $ 5.5 billion

Tinkoff, Russia’s largest online bank, pulled out of a $ 5.5 billion sale to search giant Yandex, which would have been a major upheaval in the tech and financial sectors of the country.

Yandex said on Friday that “he had not been able to agree on the final terms of the transaction with the major shareholders of Tinkoff” and that the parties had decided to conclude negotiations.

The collapse ends a year and a half of talks over what would have been a substantial link at a time when Sberbank, Russia’s largest state bank, is increasingly encroaching on the tech sector.

Shares of TCS, Tinkoff’s parent company, fell more than 6% on the Moscow Stock Exchange on the news, while shares of Yandex fell almost 4%.

Yandex had sought to expand into financial services after the collapse of a ten-year partnership with Sberbank this year.

Tinkoff has won praise around the world for its sophisticated fintech, but has struggled to grow its business against deep-pocketed competitors such as Sberbank, which accounts for nearly half of all Russian retail deposits.

A sale would also have brought welcome relief to Oleg Tinkov, the bank’s founder and largest shareholder, who is undergoing leukemia treatment in London pending extradition hearings to the United States for under-reporting his holdings of over $ 1 billion by taking Tinkoff public in 2018.

Talks have collapsed in recent weeks over disputes over Mr Tinkov’s future role at the company, according to three people close to Yandex.

Billionaire Mr Tinkov, who originally made his fortune in the beer and dumpling business, is not active in the day-to-day running of the bank but intends to retain his influence after the sale, the people said.

Tigran Khudaverdyan, deputy managing director of Yandex, wrote in a staff message that the tentative agreement announced by the companies last month “has been torn up” by Tinkov.

“We have constantly tried to accommodate Oleg’s additional requests. And of course, we agreed that Oleg would be involved in the management of the bank after the transaction and would help Yandex more generally, which would have made sense, as he would have become a major shareholder of Yandex after the transaction, ”he said. he wrote.

“But unfortunately, more and more new demands have arisen at each stage of the negotiations. So when we learned today that Oleg has made the decision to exit the market, we weren’t surprised.

Mr Tinkov wrote in an emoji-littered letter to staff that he decided to end the deal himself after reading comments on Instagram.

“We started by talking about a FUSION, looking for synergy and rapid growth in our client base. We wanted to create the largest private company in Russia. Basically it all turned into SALE – they just wanted to buy Tinkoff, with all the negative consequences for us, ”he wrote in a letter quoted by business news site The Bell.

“I have a plan: why don’t WE, not them, buy this shit Yandex!” I don’t believe in this bureaucratic enterprise: D! he added.


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David A. Albanese

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