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Update: Yandex-Tinkoff Deal Falls Through

Update: Yandex-Tinkoff Deal Falls Through

Here’s an update to last month’s news we reported stating Yandex had agreed to buy Tinkoff Bank for $5.5 billion. The deal has fallen through today because the parties failed to agree to the terms of the takeover.

Tinkoff parent company TCS Group told Reuters it is responsible for disrupting the deal. “Today I decided to break the possible deal with Yandex,” said TCS Founder Oleg Tinkov. “Tinkoff is not for sale, neither to Yandex, nor MTS.”

Our original reporting is below.

Yandex Agrees to Buy Tinkoff Bank for $5.5 Billion

Yandex has agreed to purchase Tinkoff for $5.5 billion. This is a pretty big deal, not necessarily because of the size of the transaction, but because of the players involved.

Yandex is essentially the Google of Russia– it is a tech giant in the region. And Tinkoff Bank is the world’s largest digital bank in terms of customers, boasting more than 10 million clients.

“The parties have come to an agreement in principle on a transaction that would consist of cash and share consideration worth approximately $5.48 billion or $27.64 per Tinkoff share,” Yandex said. The purchase amount, which will be paid out in a combination of cash and Yandex shares, is an 8% premium of Tinkoff’s share price as of September 21.

Today’s deal comes shortly after Yandex announced plans to halt its partnership with Sberbank, a traditional bank with 14,000 branch locations across Russia and more than $465 billion in assets under management.

Yandex is best known as a Russia-based search engine. The company has since expanded, however, launching taxi and e-commerce subsidiaries, Yandex.Taxi and Yandex.Market, respectively.

Tinkoff is a cloud-based bank that offers a range of financial and lifestyle services, including credit products, current accounts, business services, investment and insurance products, travel tools, and loyalty programs. The bank is Russia’s second-largest credit card issuer with 13.2% market share. Tinkoff is listed on the London Stock Exchange and has a market capitalization of $5.5 billion.

The deal is expected to increase competition with state-owned Sberbank, which also operates ride-sharing and e-commerce offerings. The transaction, which has yet to be finalized, is subject to due diligence and a formal offer.

Photo by Ignat Kushanrev on Unsplash