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Foreign companies that have limited their activities in Russia or announced their withdrawal from the Russian market have already lost $200-240 billion since the end of February 2022, the CSR calculated. Firms from the USA and Great Britain suffered the greatest losses.

As of the beginning of September 2022, 34% of the largest foreign companies operating in Russia limited their activities in the country, 15% decided to leave it through the transfer of a Russian division to a new owner, and 7% announced a complete withdrawal from the domestic market without selling the business. This is stated in the study of the Center for Strategic Research (CSR) "Picture of foreign business: you cannot leave," which is at the disposal of RBC. For comparison: in June, only 5% of the largest firms announced their withdrawal from Russia in one way or another.

There are 600 “largest” firms, the CSR classifies foreign companies with revenue in Russia from 5.7 billion rubles. About 44% of these companies continue to operate as usual, according to the report. In total, over 5 thousand foreign companies that have worked or are working in Russia are under the supervision of the CSR.

The most actively announced the departure of the company from Finland (80% of Finnish organizations decided to leave the country), Denmark (73%) and the UK (35%). In turn, the business of other countries is “more flexible and pragmatic” and has not yet taken steps to leave Russia, the study notes. It primarily includes companies from Austria, Japan and Switzerland. The approach of Polish business is also noteworthy, the Center for Strategic Research notes: despite the harsh rhetoric of the authorities of this country, most Polish companies retain a presence in Russia.

The reasons for leaving were not disclosed by all foreign organizations, the CSR notes, but more than half of those who announced them, according to the authors, were guided by "subjective" motives (for example, an attempt to hedge reputational losses) and only about 40% - by "objective" circumstances (for example, a ban on foreign trade transactions, changes in the exchange rate, logistical failures, difficulties with the implementation of transactions).

Restriction of activities or withdrawal for the majority of foreign organizations was associated with tangible financial costs, follows from the materials of the Center for Strategic Research. “Since the end of February 2022, they have already lost from $200 billion to $240 billion, of which $70 billion to $90 billion is accounted for by businesses that have decided to leave Russia,” the center’s experts estimated.

The largest losses in value terms, according to CSR calculations, are reported by businesses from the United States (the largest organizations lost $102 billion in Russia), Great Britain (minus $78 billion) and Germany (minus $51 billion). However, in terms of GDP, the exit of companies from Russia had the greatest impact on the economies of Finland (minus 2% of GDP), Sweden (minus 1.5%), Great Britain (minus 1.3%) and Denmark (minus 1%).

The losses of companies that announced they were leaving the Russian market with the transfer of a local division to a new owner turned out to be 23% higher than those of organizations that completely curtail their activities without transferring their division to new owners in Russia (that is, liquidate them), the report says. At the same time, the losses of the companies that have sold or are planning to sell the Russian division are on average 19% lower than those of the business that has limited its activities.

The CSR points to “significant discounts” on purchase and sale transactions of Russian subsidiaries of foreign businesses, which, according to the authors, average about 70%.

In the sectoral context, foreign businesses operating in the oil and gas, banking, automotive and food industries suffered the most losses. Companies in the field of household appliances, microelectronics, business and IT services suffered less than others.

Foreign observers' estimates are more conservative than those of the CSR. For example, in August, The Wall Street Journal reported that the losses of foreign companies in Russia against the backdrop of sanctions amounted to $59 billion. .4 billion, and ExxonMobil recorded write-offs of $3.4 billion after shutting down work on an oil and gas project in the Far East.

Among the companies that have decided to sell their business in Russia, 33% have already transferred it to new owners, 34% are in the process of transfer, and 33% are looking for a buyer, the CSR estimated. However, a ban on the sale of shares in strategic Russian companies to holders from unfriendly countries, introduced by presidential decree in August, led to the suspension of ten transactions in the sectors of electricity, oil and gas, banking and financial services, and in the future may affect the decisions of at least 60 largest foreign companies, the study says.

Among those who did manage to sell their businesses, the most popular option was to transfer companies to Russian legal entities representing private businesses (more than half of foreign companies did so). Separate divisions of foreign business were sold to representatives of countries friendly to Russia. For example, the American manufacturer of household appliances Indesit sold the assets of the Turkish company Arcelik, and the Polish retailer LPP sold the Russian division of the organization from the UAE. Less popular was the transfer of assets to the state and state-owned companies, as well as to local management.

According to the CSR estimates, at least 30% of transactions for the sale of a local unit to a new owner provide for the possibility of returning it to a foreign owner (for example, through a buyback option). Among the sold foreign companies, about a third announced rebranding. For example, the McDonald's restaurant chain changed its name to Vkusno-and Dot, the power engineering company Schneider Electric to Systeme Electric, the clothing brand Levi Strauss & Co to JNS, and so on.

To minimize losses from the actions of foreign companies that have chosen the “hard” exit scenario, without transferring their own divisions to another owner, there is a list of parallel imports, the CSR recalled. It lists sought-after original foreign-made goods, the import of which into the country is allowed without the consent of the copyright holders. This list is formed by the Ministry of Industry and Trade, while it includes only products of those brands that have suspended their activities in Russia or left the Russian market.

However, according to the CSR calculations, the brands of 25% of large foreign companies that have decided to leave the Russian market or have limited their activities in Russia are not included in it. In total, there are more than 100 such brands, for example, well-known brands of sportswear and footwear, drinks, coffee, and telecommunications equipment. Companies not included in the list of parallel imports operate in the food industry, pharmaceuticals, banks and financial services, complex chemistry, the study says.