Kremlin mounts pressure on companies that want to leave Russia
Western companies seeking to exit Russia amid the Ukraine war are encountering significantly higher hurdles, according to Reuters sources.
The Kremlin is pressuring firms to sell assets at steep discounts and making it more challenging to navigate regulations. Russian authorities are demanding large price reductions on properties being sold and complicating firms' ability to untangle operations, the sources said.
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According to the news agency, foreign companies have already suffered losses of more than $80 billion from their operations in Russia due to write-offs and lost profits.
Moscow is now demanding a 50% discount on all foreign deals after Russian government-appointed consultants assessed the business. In addition, the Kremlin demands a contribution to the Russian budget of at least 10% of the price.
Among the companies that are still trying to exit the Russian Federation are the telecommunications group Veon, the technology group Yandex, registered on the Nasdaq, and the Italian bank Intesa.
A financial market source working with companies seeking to leave Russia said the commission was sending some deals back, saying the valuation should be 20-30% lower. This is an "unpredictable black box," said a source familiar with the matter.
Another person who deals with M&A and deals with foreign companies noted that deals worth more than $100 million are at particular risk of rejection. This source said the latest price change is holding back sales and forcing companies to consider alternatives.
Today, the brewing company Heineken announced the completion of the agreement on the sale of its assets in Russia to the Arnest Group. According to the concern, the purchase price of the business is 1 euro for 100% of the shares. Earlier, the company announced that the conditions for leaving Russia would be complicated.
At the end of July 2023, the German energy giant Wintershall Dea said that the withdrawal from Russia was becoming increasingly difficult due to the unpredictable political situation.
Austrian Raiffeisen Bank International said that it will have to pay up to 100 million euros in one-time tax on excess profits to the budget of Russia.