Trump's deal with Putin: Are Western companies back to Russia?

Trump's deal with Putin: Are Western companies back to Russia?

One of the central questions that are raised as part of the talks between Moscow and Washington about the end of the Ukraine War is whether the company migration from Russia, which took place as a response to the invasion in February 2022.

Current situation of the company migration

As long as the extensive western sanctions remain against Russia, a reversal of this emigration appears unlikely. However, if the administration of US President Donald Trump tries to loosen the restrictions, this could enable some companies to return to a formerly growing market.

Over the past three years, more than a thousand companies, from McDonald’s ( McD ) to Mercedes-benz, Russia. This was done by sales, the handover to existing managers or through a complete withdrawal. Some companies such as Danone and Carlsberg had even lost their assets and were forced to sell their businesses. According to an analysis by Reuters in March 2024, the loss of Western companies amounts to a total of $ 107 billion, including lost income. Kirill Dmitriev, head of the Russian direct investment fund, even gives higher losses of $ 324 billion for US companies that have left Russia.

Return of companies: Who could come back first?

For companies that work outside of sanctions, such as retailers and food producers, a return could be the most likely. Dmitriev was optimistic and said that he was expecting a return of several US companies in the second quarter. He also believes that large US oil companies that were successful in Russia will return.

A high -ranking Russian legislator, Anatoly Aksakov, mentioned that he thinks, Visa ( v ) and MasterCard ( ma ) could soon restore their payment services, although both companies assert that their Russia barriers still exist.

reasons for rejection of a return

Numerous western companies, including Carlsberg and Unilever ( Ul ), published explanations that Russia's aggression condemned against Ukraine. Your Deployment from the country or the suspension of the shops was shown in moral terms. If an agreement is made that rewarded Russia with Ukrainian territory, such companies could risk significant reputation damage.

industries that are excluded

companies that serve both civil and military applications are subject to western restrictions. For example, Boeing ( Ba ) and Airbus set the delivery of aircraft and spare parts to Russia. There are also similar restrictions on semiconductors, telecommunications devices and electronics. While speculation about a possible mitigation of the sanctions, no concrete suggestions have been made so far. The European Union approved the 16th package of anti-Russia sanctions on Wednesday.

changes in the Russian market

The Russian market has changed significantly. Some of the most popular brands in the world, from Starbucks ( sbux ) to Ikea and Levi’s ( Levi ) were replaced by Russian imitations. The more than 800 McDonald’s branches in Russia now operate under the name Vkusno & tochka (delicious & that's it) and Starbucks has his business to the restaurateur Anton Pinskiy and the rapper Timati sold, which is now known as Stars Coffee.

The future of western companies in Russia

Moscow has repeatedly announced to react to what it sees as a robbery of Russian assets abroad. Russia's control over a handful of western companies takes place through the alleged “temporary administration”. Russia has also increased the assets of companies with foreign property relationships. Most companies that left Russia had to sell their assets with considerable discounts. It could therefore take a while for investors to be ready to get into the Russian market again.