Privately held Russian oil producer Lukoil has agreed to partially bankroll a long-discussed deal to help transfer ownership of the country’s top search engine and news aggregator, Yandex, to Russia-based investors.

Yandex — often referred to as ‘Russia’s Google’ — is regarded in the West as a major source of propaganda, with the European Union last year reiterating its stance that the company is “responsible for promoting [Russian] state media and narratives in its search results” and “removing content critical of the Kremlin, such as content related to Russia’s war of aggression against Ukraine”.

Lukoil’s interest in Yandex was originally eyed by the oil company’s founder and industry veteran Vagit Alekperov, who resigned his role as executive chairman shortly after the the UK, Australia and New Zealand imposed sanctions on him and other leading Russian businessmen as part of a wide-ranging response to the Ukraine invasion in February 2022.

Alekperov is estimated to hold a more than 28% stake in the oil producer directly and indirectly, according to the Russian edition of Forbes Magazine.

Lukoil said in a statement that it will hold a stake of about 10% in Yandex once the deal receives the necessary regulatory approvals in Moscow.

However, it noted that the transaction will be completed “without the participation of any shareholders in Lukoil or persons affiliated to them”.

The controlling stake in Yandex’s Russian business is currently held by a Dutch-registered parent company, Yandex NV.

The buyer is a specially formed consortium of Russian investors that includes about 50 of Yandex’s top managers and three Russian businessmen, as well as Lukoil, according to Yandex NV.

Former Gazprom executive in deal

Among the businessmen is oil and gas industry veteran Alexander Ryazanov, who served as deputy executive chairman of gas giant Gazprom between 2001 and 2006 after a long career in industry ventures in West Siberia.

Yandex NV said the value of the transaction has been reduced by 50%, as ordered by President Vladimir Putin in retaliation against countries involved in international sanctions on Russia and its corporations.

As a result, Yandex NV will receive a cash payment of about 230 million roubles ($2.6 billion), which will be paid in Chinese yuan outside Russia rather than US dollars.

It will also receive about 176 million of its own shares that the purchasing consortium will buy from other investors.

Yandex NV said that the value of its entire IT business was estimated at $10.2 billion before the transaction was agreed.