Russia’s richest man eyes abandoned Western assets
The exit of Western companies from Russia due to Ukraine-related sanctions has opened many new opportunities for domestic firms to invest and expand their portfolios, businessman Vladimir Potanin said on Thursday during the VTB Bank ‘Russia Calling!’ forum.
Russian companies should, according to Potanin, use the situation to their benefit.
“There’s so much… that foreign investors have left for us, one just has to pick it all up,” the businessman stated. The owner of mining giant Norilsk Nickel and Russia's richest person, according to Bloomberg, Potanin himself found a good bargain on a foreign divestment in recent months, acquiring Rosbank from the French banking group Societe Generale. He also acquired a controlling stake in Tinkoff Bank from Oleg Tinkov, who left Russia following the start of the military operation in Ukraine.
In an interview with the news outlet RBK earlier this year, Potanin noted that the “panicked exodus” of foreign companies from the Russian market cleared the way for their businesses to be acquired on very attractive terms. While the details of his purchases of Rosbank and Tinkoff were not made public, sources claim both acquisitions were made at steep discounts.
Some 300 foreign companies have left the Russian market under sanctions pressure since the start of the Ukraine conflict in February 2022, according to KSE’s Leave Russia tracker. Like the sanctions themselves, the companies’ departure was intended to weaken the Russian economy.
However the situation has played into the hands of Russian businessmen, especially due to divestment rules the government introduced earlier this year. Firms exiting Russia are required to sell their assets at a 50% discount, while also needing to obtain government permission for the sale and pay a mandatory fee to the Russian budget.
Russian President Vladimir Putin, who also addressed the VTB forum on Thursday, noted that the exit of Western firms has been lucrative for the Russian economy, with domestic companies simply “taking over everything and moving forward.” He also noted that the number of foreign companies operating in the country has in fact increased after the introduction of sanctions, from 24,100 in March 2022 to 25,600 in November of this year.
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