Russian Businesses Capitalize on Western Exodus
Date
11/13/2023 7:58:34 AM
(MENAFN) As international companies exit the Russian market due to sanctions and increasing pressure, Russian businesses are swiftly stepping in to fill the vacuum, capitalizing on the discounted assets left behind by departing Western firms, according to a recent report by Bloomberg. Prominent examples include the exit of United States fast-food giant McDonald's, packaging group Ball, and chemicals manufacturer Henkel.
In 2022 and the first half of this year, Western companies offloaded businesses in Russia amounting to at least USD21 billion, as estimated by the AK&M news and research agency. Notably, this new wave of Russian entrepreneurs, largely unknown outside the country, has yet to find itself on United States or European Union sanctions lists.
One illustrative case is Aleksey Sagal's Arnest Group, initially focused on cosmetics and household goods. The company acquired Ball's Russia-based beverage packaging business for USD530 million in September 2022 and later secured a symbolic EUR1 deal for 100percent of the Russian assets of Heineken, the world's second-largest brewer, in August of the following year.
Another example involves Aleksandr Govor, whose wealth is rooted in the coal business. Govor took over McDonald's in Russia after the US giant decided to exit the market. Rebranding the chain as 'Vkusno i Tochka' (Just Tasty), Govor acquired all 850 Russian outlets from its former franchise, a significant expansion from the previous 25 restaurants. In June, the rebranded fast-food chain reported surpassing its predecessor, registering over 500 million visits in the past year.
This trend showcases how Russian businesses are not only weathering the storm of international sanctions but actively leveraging the departure of Western counterparts to bolster their market presence and assets.
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