In the post-Ukraine war era, a unique trend is shaping Russia's business landscape. Big Western players like McDonald's, Ball Corp., and Henkel AG made a swift exit, leaving behind a $21 billion void. Enter a new generation of Russian business leaders, seizing opportunities amidst the multinational exodus.
These emerging tycoons, previously flying under the international radar, strategically filled the vacuum. Ivan Tavrin, known for his stint with a Russian mobile phone company, made headlines by investing over $2 billion in acquiring Avito, the local online ad-placement service previously under Prosus NV.
Meanwhile, Alexei Chagall of the Arnest group secured Ball's beverage packaging assets and Heineken NV's Russian operations. Alexander Govor stepped up by purchasing McDonald's Russian business, expanding its footprint from 25 to a staggering 850 restaurants.
What sets these newcomers apart is their ability to navigate the complex web of U.S. and E.U. sanctions. While Western giants grappled with restrictions, these savvy entrepreneurs capitalized on discounted assets, positioning themselves as beneficiaries in the latest wave of Russian business reshaping.
But it's not just the newcomers making strategic moves. Established oligarchs like Vladimir Potanin and Andrey Komarov are also capitalizing on the void. Potanin, before sanctions hit, made a significant acquisition with Rosbank PJSC.
Komarov, on the other hand, took advantage of the situation by acquiring three Russian factories from Amcor Plc.
Adding another layer to the evolving dynamics are state restrictions, including a Kremlin ban on foreign investors selling Russian assets without government approval.
This plays into the hands of these new buyers, offering them a favorable environment for business expansion. In a significant move in 2022, the government took control of local subsidiaries of Danone and Carlsberg, aligning with allies of President Putin.
As the business landscape transforms, new rules come into play. Companies are now required to contribute to the budget when selling Russian assets, even at a nominal or free transfer.
This move reinforces the government's efforts to maintain control amid the shifting economic tides, making it a strategic play for both the emerging and established players in Russia's dynamic business scene.
[With information sourced from Bloomberg]