As of December 7, 2023, only 303 global firms have completely pulled out of Russia by selling or liquidating business, according to the Kyiv School of Economics (KSE). This is a drop in the ocean, after almost two years since the full-scale invasion of Ukraine and almost a decade since the illegal annexation of Crimea.
The overwhelming majority (58% or 2,134) of international companies with ties to Russia at the start of 2022 continue to do business within the aggressor state while 1,218 are in the process of leaving.
KSE identified information on deal amounts for less than one-third (~30%) or 87 of 300 departed companies. Considering total revenue size, data is available for approximately 60% of the firms.
Calculations suggest a total transaction value of $16.7 billion. An alternative estimate from Bloomberg, citing AK&M, suggests a figure of around $21 billion. Due to undisclosed transaction details for many companies, the total transaction amount could be approximately 1.5 times higher, reaching around $25 billion, KSE notes.
European companies have declared nearly €100 billion in write-offs from operations in Russia, though not critical to their global investments.
New Russian business elite
The Russian pro-government business elite emerges as the beneficiary of Western corporate departure. 303 exited companies represent 386 legal entities sold by Western companies, with almost half of such transactions going to representatives of local top management. In 94% of cases of purchases of western assets buyers were from Russia, with only a few representing residents of “friendly” countries such as China, Turkey, or the United Arab Emirates.
Media highlights individuals like Ivan Tavrin, former head of a Russian mobile communications company, and Alexey Sagal from Arnest Group, as key players in acquiring western assets.
Notable acquisitions include Tavrin’s purchase of Prosus NV Avito and Sagal’s acquisition of Ball’s drinks packaging assets and Heineken NV’s Russian units.
Seized Russian subsidiaries belonging to Danone and Carlsberg’s Baltika have landed in the hands of Putin’s loyalists Yakub Zakriev, Chechnya’s agriculture minister and nephew of Putin’s ally Ramzan Kadyrov, and Taimuraz Bolloev, a longtime friend of the president and a close ally of the Kovalchuk brothers also allied with Putin.
B4Ukraine calls on G7, EU and Swiss governments to urge their businesses to cut ties with Russia and issue business advisories to warn of the heightened risks of continuing business operations in the aggressor state.