Russian Tech Giant Unloads News Business as Censorship Grows

Bloomberg News, Bloomberg News

A delivery courier for Delivery Club picks up a food order in Moscow, Russia, on Monday, March 30, 2020. Russia moved toward a lockdown across the world’s largest country by area on Monday to try and halt the spread of coronavirus, following Moscow Mayor Sergei Sobyanin’s order for residents to stay in their homes. , Bloomberg

(Bloomberg) -- Yandex NV, Russia’s leading search engine, announced a binding deal to rid itself of its controversial news aggregator, which has been criticized by opponents of the Kremlin’s war in Ukraine for whitewashing evidence of human rights crimes.

Yandex exchanged its news division and a blog site for VK’s Delivery Club, Russia’s biggest food and grocery delivery service, the company said in a statement on Tuesday.

The deals come amid a major shift among Russian technology companies brought on by the war in Ukraine. A top aide of President Vladimir Putin is involved in negotiations over the fate of Yandex with its founder sidelined by European Union sanctions, Bloomberg reported this month.

Yandex agreed in principle to sell the units to VK in April, as the news service was caught between the Kremlin’s increasingly harsh internet crackdown and a backlash in key foreign markets. Two top executives, including founder Arkady Volozh, have been forced to step down after being sanctioned by the EU since the start of the war.

VK held Delivery Club, together with express grocery service Samokat and ride-hailing app CityMobil, in a joint venture with the sanctioned Russian lender Sberbank PJSC. VK signed binding documents to receive full control of Delivery Club and exit the joint venture, it said in a statement Tuesday.

VK is run by the son of Sergei Kiriyenko, the Putin aide involved in negotiations over Yandex’s future. It is controlled by companies affiliated with Gazprom PJSC, the state-owned gas giant.

Yandex said the strategic exit from its media business will let the company focus on its search, advertising and other businesses. It will keep the Delivery Club brand, which will become part of Yandex’s e-commerce, mobility and delivery segment.

The transactions are subject to regulatory approval.