Yandex is no longer buying Tinkoff Bank. The $5.4-billion mega deal collapsed due to a lack of ‘synergy.’

TCS Group announced on Friday that the sale of Tinkoff Bank to the tech giant Yandex has collapsed and the deal is now “terminated.” “Following further discussions, including with Tinkoff's controlling shareholder, the parties have agreed not to proceed with the potential transaction,” the company said, offering no further explanation. In a separate press release, Yandex confirmed that it is no longer buying Tinkoff Bank, saying that it failed to finalize terms with the bank’s main shareholders.

On October 16, spokespeople for Tinkoff Bank told The Bell: “We’re not in talks with anyone” and said the bank “will develop further independently.” In a letter to his staff, obtained and verified by The Bell, Oleg Tinkov (who owns 40.2 percent of TCS Group, Tinkoff Bank’s parent company) said the talks collapsed chiefly because Yandex insisted on buying the bank rather than merging with it. “Tinkoff won’t be sold to Yandex or MTS,” Tinkov told the bank’s staff, saying he’d wanted to combine forces to create Russia’s biggest private company.

TCS Group announced the tentative sale of 100 percent of Tinkoff Bank to Yandex for $5.4 billion in late September 2020. The Bell described the planned acquisition as a “strategically important decision” that would allow Yandex to dominate Russia’s emerging “FinTech” market. (Yandex acquired the independent right to develop financial-technology projects earlier this summer, after parting ways with Sberbank.)