Yandex plans $5.5bn acquisition of Russian neobank Tinkoff

Written by Alex Hamilton
24th September 2020

Russian technology firm Yandex has agreed a $5.5 billion deal for the acquisition of online-only Tinkoff Bank.

Yandex split from Sberbank in June as it pursued greater entrance to the tech sector

Yandex has prepared a cash and share offer for all Tinkoff’s share capital. The technology firm is happy to pay an 8% premium.

The idea of a combination with Yandex surfaced in 2019 at the International Economic Forum in St Petersburg.

Oleg Tinkov, founder and key shareholder in Tinkoff owner TCS Group, suggested that a merger with Yandex could create a company worth $20 billion.

Tinkoff is one of the world’s largest online banks and has more than ten million customers.

The bank has focused on retail banking and digital design but has run up against established Russian FIs like state-owned Sberbank.

As a result, it has explored the possibilities of launching an offshoot fintech venture offering non-credit financial products in Europe.

Yandex success?

Search engine and technology company Yandex has expanded its business into a series of new channels.

It severed ties with Sberbank in June, bringing a ten-year partnership to an end. Yandex spun out its payment platform Yandex.Money and agreed to buy out Sberbank’s 45% share in Yandex.Market.

Executives at both firms said the relationship between Sberbank and Yandex had grown acrimonious, as the latter moved further into the technology space.

This was compounded when the Russian bank founded a series of Yandex competitors.

“Competition between Sberbank and Yandex’s ecosystems had begun to grow, so we looked for a mutually acceptable way out,” Lev Khasis, Sberbank’s first deputy chief executive, said in a statement at the time.

Rumours of a deal with Tinkoff Bank began to formulate not long after the Yandex-Sberbank split.

According to Yandex, final terms of the deal subject to due diligence and agreement on “definitive documentation”.

“There can be no certainty that any firm offer will be made for Tinkoff, nor as to the final terms on which any firm offer might be made,” the firm writes.