Western Companies Face Dilemma Amid Trump's Return and Russia's Exit Conditions

As Donald Trump prepares to resume the presidency, hundreds of Western companies operating in Russia confront a crucial decision: stay or leave?

Hold or Fold: The Cost of Exit

Since Russia's invasion of Ukraine in 2022, several companies, such as Renault, McDonald's, and Heineken, have exited the Russian market. However, many others remain, including those providing essential goods like food and hygiene products.

Moscow has recently tightened exit conditions, requiring substantial discounts and "voluntary contributions" to the Russian budget. This has made leaving more expensive and complex.

Trump's Impact: Uncertainty and Potential Relief

Trump's election has introduced an additional layer of uncertainty. Some believe his administration may reduce the costs of staying in Russia, creating a "stasis" for multinational corporations.

Others anticipate potential sanctions relief if Trump can negotiate a settlement in Ukraine. This could unfreeze foreign-owned assets and trigger another wave of exit deals.

Navigating the Exit Committee

Companies face challenges in negotiating exit terms with Russia's government, which is keen on safeguarding its budget and preventing undervalued asset sales.

Independent appraisals, auctions, and presidential approvals are now required for deals exceeding 50 billion roubles. Higher budget contributions are also deterring some sellers.

Risk of Asset Seizure

Companies choosing to stay in Russia face the ongoing risk of asset seizure. Moscow has placed several foreign-owned assets under temporary management, potentially pressuring prices down for local buyers.

Trump's Wildcard: More Unknowns

Trump's presidency brings further uncertainty for Western companies in Russia. His unpredictability could impact both exit strategies and potential sanctions relief.

Ultimately, the decision to stay or leave will depend on each company's individual circumstances, weighing the costs of exit against the potential risks and benefits of remaining in Russia.