300 companies left Russian market, value of deals may reach US$25 billion – KSE Institute

Out of over 1,500 foreign companies that own or owned assets in Russia, only 304 have completed their exit process. The potential value of deals for these 300 companies may reach US$25 billion.

Source: KSE Institute.

Experts from the KSE Institute say that even these amounts are far from market values.

Quote: "Besides those who have completed deals, another 320 firms are attempting to exit Russia, publicly declaring their intentions or suspending operations. The largest companies that have fully exited generated US$82 billion in revenue, while those in the process of exiting generated US$65 billion," the statement reads.

Calculations by the Kyiv School of Economics indicate that the estimated value of these 'exits' ranges from US$16.7 to US$21 billion. Furthermore, considering undisclosed deals, the potential value may approach US$25 billion, indicating significant discounts in sales. For instance, some companies (Heineken, Nissan, OBI Group, Renault, Tetra Pak) were sold for just EUR 1. At the same time, others, such as Carlsberg Group and Danone, were effectively nationalised by the Russian government," the KSE Institute emphasised.

Among the largest deals is the sale of the Russian classifieds business Avito (valued at US$2.4 billion), owned by the Dutch investment group Prosus, as well as the sale of a 40% stake (US$1.8 billion) by Eni in the Arctic gas project of Rosneft.

Of the 386 legal entities owned by nearly three hundred Western companies, individuals acquired 25%, and almost half were acquired by local top management, added the KSE Institute. Most buyers (94%) were from Russia, with others from China, Türkiye, and the UAE.

The experts also calculated that some companies shipped goods to Russia worth US$3.6 billion just before their exit and US$0.4 billion after it. "Indirect supplies amounted to US$2.5 billion and US$1.4 billion, respectively. This includes L'Occitane, the French cosmetics manufacturer, which continued trading through intermediaries after its exit. Despite promises and assurances, some other companies are also not rushing to completely sever ties with Russia, such as Technip Energies (continuing to make a significant contribution to the sanctioned project 'Arctic LNG-2' related to liquefied natural gas production) and Baker Hughes (shipping oil and gas drilling equipment to Russia after the announcement of the exit)," the report stated.

As of 17 December 2023, a total of 304 international companies (8.3% of the total number of records in the KSE database or 23.6% of companies that earned income in Russia in 2022) have completely ceased operations in Russia. Additionally, 1,232 companies (33.7% of the total number) have wound down operations and expressed an intention to leave the aggressor country. Meanwhile, 1,573 companies (43% of the total number) under the monitoring of the KSE Institute have yet to leave the Russian market, operating without any changes. Another 547 (15% of the total number) have suspended new investments and continue to wait.

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