Two other international giants have decided to leave Russia. This is the French car manufacturer Renault, which has ceded all of its assets in Russia to the Russian state, and the fast food giant McDonald's, which on Monday morning said it had started the process of selling its assets in the country. These are the latest companies in chronological order to have announced farewell to Russia after the invasion of Ukraine. A few days ago, for example, it was also touched to Siemens and Shell and even earlier to SocGen.
Renault says goodbye to Russia
Renault has handed over all its assets to the state. The announcement came from the French automaker and was later confirmed by the Ministry of Industry and Trade in Moscow.
In fact, the company explained that “the automaker's board of directors unanimously approved the signing of agreements for the sale of 100% of the shares of the Renault group in Renault Russia to the city of Moscow and its 67,69% stake in Avtovaz al Nami (Central Institute for Research and Development of Automobiles and Engines)”. The note does not mention figures, but explains: "The agreement provides for a repurchase option by the Renault group of its stake in Avtovaz exercisable at certain periods over the next six years".
For its part, the Moscow Industry Ministry explains that “Agreements have been signed for the transfer of Russian assets from the Renault group to the Russian Federation e to the Moscow government”. Thanks to this operation, the Moscow government now holds 100% of the shares of Renault Russia, while a 67,69% stake in Avtovaz has passed to Nami. Avtovaz will continue to assemble the entire range of Lada cars at its plants and offer maintenance services for Renault passenger cars in Russia.
"Today we have made a difficult but necessary decision; we are making a responsible choice towards our 45.000 employees in Russia, preserving the group's performance and our ability to return to the country in the future, in a different context,” said Renault CEO Luca de Meo. “I am confident – he adds – in the ability of the Renault group to further accelerate its transformation and to exceed its medium-term objectives”.
Renault: a dearly paid exit
Among Western companies, however, Renault was the most exposed to the country. Russia was in fact the second world market of the group after Europe, with almost 500 thousand vehicles sold in 2021, but the presence of the French company in the country had been questioned since the beginning of the Russian offensive in Ukraine. The exit from Russia will therefore not be painless for Renault. The cost should in fact be around 10% of the turnover. In the first quarter, the French automaker reported revenues of 900 million euros in Russia, of which 527 million came from its 67,69% stake in Avtovaz and 367 million from Renault Russia. The latter also owned the huge plant near Moscow where Dacia Duster, Renault Kaptur, Renault Arkana and Nissan Terrano were produced, for a total of about 95.000 vehicles.
After the news, on the Paris Stock Exchange, the Renault title it opened trading, yielding 0,7% of its value, but by mid-morning it was back above parity (+0,1% to 23,64 euros).
McDonald's: goodbye to Russia after 30 years
The opening of the first McDonald's in the Soviet Union thirty years ago, on January 30, 1990, had become a symbol, a tangible sign of the new world that opened up with the end of the cold war. Now his farewell becomes an equally important sign of the chasm created between Russia and the West after the invasion of Ukraine.
McDonald's said this morning that it has initiated the process of selling its assets in Russia and that it is currently looking for a Russian buyer who can hire its workers. These are around 850 restaurants where around 62 people work. The announcement comes after the company "temporarily" closed all its offices in Russia last March, including the historic restaurant in Pushkin Square, but would continue to pay employees.
As part of the exit, the company expects to record a non-cash debit of approximately $1,2-$1,4 billion.
According to McDonald's, staying in the country is no longer sustainable nor coherent with the values” of the company.
