Russian internet services company Yandex is in discussions with TCS Group to acquire the country’s online lender Tinkoff Bank.
The two sides have reached an “agreement in principle” for the potential acquisition.
According to the data sent to the London Stock Exchange (LSE) by TCS, the deal is valued at $5.48bn or $27.64 per Tinkoff share.
The potential cash-stock deal awaits the completion of due diligence and agreement on closing conditions.
Russia’s TCS group founder Oleg Tinkov had first suggested to Yandex CEO Arkady Volozh that they combine his bank with Yandex.
The statement issued to LSE reads: “The current intention of Tinkoff and Yandex is for the Potential Transaction to be implemented by means of a scheme of arrangement of Tinkoff.
“As a result, the Potential Transaction will be subject to the jurisdiction of the Cyprus courts under sections 198 to 200 of the Companies Law of the Republic of Cyprus (Cap. 113) and the Cyprus Securities and Exchange Commission pursuant to the Takeover Bids Law, Law no. 41(I)/2007 (as amended) (to the extent determined to be applicable).”
Yandex is one of the few search engines globally with a higher local market share than Google.
The firm recently also forayed into taxis, ecommerce, and entertainment industries, which led to its growth.
This growth sunk its partnership with Russian government-owned Sberbank, which offered to buy a majority stake in Yandex back in 2018, but was refused.
Sberbank then set up various businesses to compete with its tech rivals, and sold half of its e-commerce joint venture back to Yandex for $600m.
Tinkov 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.”