Companies that left Russia lost $240 billion

Companies that left Russia lost $240 billion

Foreign companies that stopped working in Russia have lost $200-240 billion since the end of February, when the war in Ukraine began, the Center for Strategic Research (CSR) calculated.

At the beginning of September 2022, 34% of the largest foreign companies limited their work in Russia, another 15% left the country, transferring assets to new Russian owners, and 7% announced a complete withdrawal from the country without selling their business.

At the same time, the remaining 44% of foreign companies continue to operate as usual, writes RBC with reference to the study of the CSR “Picture of foreign business: you can’t leave, you can’t stay.” In total, the CSR included in the study more than 5 thousand foreign companies, of which 600 companies belong to the “largest”.

In terms of countries, most of the companies that left Russia came from Finland (80%), Denmark (73%) and the UK (35%). Experts note that the business of other countries is “more flexible and pragmatic.” This also applies to companies from Austria, Japan, Switzerland, as well as Poland, whose authorities harshly criticize Russia.

According to CSR estimates, only 40% of companies left Russia for “objective” reasons related to the ban on foreign trade operations, changes in the exchange rate, logistical failures and difficulties with transactions. All the rest left the Russian market for “subjective” reasons, trying to reduce reputational losses.

In total, foreign companies that left or limited their activities in Russia have lost up to $240 billion since the end of February, of which $70-90 billion are accounted for by those who decided to leave Russia. At the same time, those companies that transferred their business to a Russian owner lost an average of 23% more than those that simply left. However, those companies that sell their business lose 19% less than companies that restrict operations.

Companies from the US ($102 billion), the UK ($78 billion) and Germany ($51 billion) lost the most. The departure of companies from Russia most affected the GDP of Finland (minus 2%), Sweden (minus 1.5%), Great Britain (minus 1.3%) and Denmark (minus 1%).

In the sectoral context, the largest losses were suffered by companies operating in the field of oil and gas production, the financial sector, the automotive industry and the food industry. Companies that produced household appliances, microelectronics, and also provided business and IT services were the least affected.

The CSR estimate of the losses of foreign companies turned out to be almost five times higher than the estimates of Western experts. In total, foreign companies lost $59 billion from leaving Russia, wrote in August Wall Street Journal. McDonald’s (up to 1.4 billion) and ExxonMobil (3.4 billion) suffered the greatest losses.

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