companies that announced their withdrawal from the Russian Federation suffered losses of $103 billion

Western companies, which after the start of the full-scale Russian invasion of Ukraine announced their withdrawal from Russia, suffered a total of 103 billion dollars in losses. This was reported by The New York Times newspaper, which conducted an analysis of financial reports.

According to the publication, Vladimir Putin managed to turn the exit of companies into a benefit for the loyal elite and the entire state. Companies leaving the market are forced to sell assets in Russia at bargain prices, and the circle of buyers of these assets is determined by President Putin himself, the newspaper writes.

In their investigation, the journalists described how the companies coordinate their exit from the Russian business with the Russian government. Since the beginning of the war, all such transactions must be agreed with a special subcommission of the Ministry of Finance of Russia. A number of transactions, including bank shares, must be approved by Putin himself starting in August 2022.

In December 2022, the subcommittee of the Ministry of Finance obliged the exiting companies to make a discount of at least 50% when selling, and along the way make a “voluntary contribution” to the budget of Russia – from five to ten percent of the market value of the asset.

Probably, it was these “voluntary contributions” that brought the Russian budget at least one billion 250 million dollars in the last hour, the publication notes. As RBC wrote, from December 2022 to April of this year, the total amount of contributions amounted to 20 billion rubles.

This is how one of its participants described the sales process to journalists: “It’s worth it [иностранной] the company will agree on a deal with [российским] the buyer, how the negotiations begin again. This time it is secret – between the buyer and one of the ministries. The seller, for the most part, does not participate in them. These negotiations often end with a reduction in the sale price, and sometimes with a change of buyer. Then the deal goes to the subcommittee for approval [Минфина]. Sometimes, the deal breaks down after months of silence.”

Since the spring of 2023, the Russian divisions of several Western companies that planned to leave Russia were nationalized.

As an example of a transaction in which the state intervened, the NYT cites requests from the Dutch brewing company Heineken to sell Russian assets. The Russian authorities refused to negotiate a deal with the buyer of Heineken’s assets and handed them over to the Arnest Group, which produces Dichlorvos repellents, Prelest hairspray, as well as air fresheners, deodorants and shoe cream.

• Russia invaded Ukraine on February 24, 2022. In response, the United States and European countries regularly impose sanctions prohibiting or limiting cooperation with Russian organizations.
• After the Russian invasion of Ukraine, more than 1,500 organizations closed their activities in Russia, of which 533 left the country completely.