Hundreds of Western companies have withdrawn from Russia in recent months. Insiders are now showing that Western companies are securing their ticket back into the Russian market via a buyback clause. And apparently many German companies are keeping the option of returning open.
The war in Ukraine and the sanctions against Russia quickly pushed most Western companies out of the country. The Kremlin, on the other hand, is confident that they want to return to Russia. “Many companies from Western countries remain interested in the Russian market,” Kremlin spokesman Dmitry Peskov told Interfax. Public pressure would have forced companies to stop working in Russia. Nevertheless, the companies would want to return at the first opportunity, Peskow claims.
And not entirely without reason: Apparently, numerous companies have ingenious buyback clauses, as an unnamed Western management consultant told the “Welt”. While international corporations such as Siemens, Henkel and Ikea are suspending their work in Russia, McDonalds is selling its more than 800 Russian branches to the Russian investor Alexander Gowor.
Now save articles for later in “Pocket”.
However, the fast-food company does not seem to want to withdraw completely from Russia: the documents of the Russian anti-monopoly authority FAS, which approved the sale, show that the Americans have negotiated a right of return. The buyback option at arm’s length was negotiated for a period of 15 years. Gowor is not allowed to use the trademark rights of McDonalds, which is why he continues to run the chain with a new name.
The French carmaker Renault is said to have secured a six-year right of return, the Russian news agency Interfax reported in April, citing Trade Minister Denis Manturov. According to “Welt”, the depreciation of the group amounts to 2.2 billion euros. Renault CEO Luca de Meo then said that Renault was keeping open the possibility of returning to Russia in a different context. Renault and McDonalds are not alone in this: The western management consultant explained to the “world” that he did not know of any company that would give up its Russian business without a buyback option.
The food company Dr. Oetker was one of the companies that went public with their sale soon after the start of the war. The family business sold all shares in the Russian subsidiary to the previous managing directors in April and thus ceased all activities on the Russian market. dr Oetker thus ends its 30-year company history in Russia. Around 150 employees worked for Dr. Oetker produces and sells yeast, baking powder and pudding powder in the two plants in Moscow and Belgorod.
The website of the Bielefeld food manufacturer states that Dr. Oetker would completely withdraw from Russia. At the request of FOCUS Online, however, the company did not want to comment on whether a buyback clause had been negotiated. Whether Dr. Oetker has left a loophole open, remains open. The shoe company Deichmann operated 37 branches in Russia before the Russian war of aggression. Germany’s largest shoe retailer sold all rights and obligations to a member of local management. Deichmann informed FOCUS Online that there was no buyback clause and that a return to the Russian market was not planned.
Whether the implementation of an agreed buyback clause will work at all is open to Roland Görtz, an expert on Russian economics at Freie Universität Berlin. After all, after the current loss of image, it is safe for the Russian managing directors not to comply with the option, according to Roland Görtz. Western companies also know that Russian managing directors could take maximum advantage of the situation.
The Russian automobile manufacturer Gaz is a close partner of the Wolfsburg-based company in its Russian business: more than a quarter of the VW and Skoda models manufactured in Russia rolled off the assembly line at Gaz in Nizhny Novgorod. Russia is one of the most important growth markets for VW. Between 2006 and 2021, the group invested a whopping 2.06 billion in its Russian business. However, the Volkswagen Group has not announced a definitive withdrawal from Russia.
On the other hand, the food company Nestle was heavily criticized by consumers, activist groups and politicians, which is why the group took most of its products off the shelves in Russia. Nestle now only provides basic foodstuffs, such as baby food, as well as medical and hospital-specific nutrition. The Düsseldorf-based energy group Uniper also does not want to make any further investments in Russia. The process to sell Uniper, which was initiated at the end of last year, is being stopped for the time being. So far, neither German group has said anything about a complete withdrawal from the Russian market.
In the case of companies that do not have their own branches in Russia and have only exported, on the other hand, more than 49 percent no longer continue the relationship, reports Lisandra Flach. No wonder, says Flach: The decision to leave the Russian market permanently is associated with significantly higher costs for these companies compared to companies that ‘only’ trade with Russia.
“Above all, an orderly withdrawal from the Russian market is time-consuming,” says Hella Engerer, research associate at the German Institute for Economic Research in Berlin. According to Engerer, it remains to be seen whether companies that have announced a (partial) exit actually carry this out. The stand-by mode suggests that many Western and thus also German companies will return to the Russian market when the war comes to an end.
What is clear is that most companies have reassessed their economic relations with Russia since the Russian war of aggression. After all, only a fraction of the companies (3.2%) report that they have continued business unchanged, says Lisandra Flach from the ifo Institute.
