Foreign companies in Russia, some of whom have been in the country for decades, are divesting or suspending operations en masse. This ‘Great Business Retreat’, as it is being called, comes in response to crippling Western sanctions on Russia for its ongoing invasion of Ukraine.
The vast majority of these businesses have suspended sales or operations in/with Russia, from household names such as IKEA to more obscure organisations like the International Cat Federation (which has banned Russian felines from international competitions).
Meanwhile, at the other end of the spectrum, a few companies have decided to entirely divest from all or certain assets in Russia, such as BP’s announcement of intent to sell its 19% stake in Russian state-owned energy behemoth Rosneft. In any case, it is important to note that the vast majority of the companies taking action in Ukraine (more than 330) are ‘Western’ businesses. A full list of names can be found below, as compiled (in more detail) by Yale School of Management – last dated 10 March.
The power of this Great Business Retreat from Russia has historical parallels. Following US sanctions on South Africa in the 1980s (due to the apartheid), more than 200 Western companies cut all ties with the country, resulting in a loss in excess of $1bn in direct investment (from the US alone). These actions put the South African economy under extreme pressure, leading in part to the dissolution of the apartheid regime.
How Vladimir Putin will react to similar punitive measures and corporate boycotts is less clear. The Kremlin has already made several radical attempts to stem the bleeding.
More coverage of the Ukraine invasion from Investment Monitor:
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