Reports from this week suggest how the French company Schneider Electric SE is in agreement for the sale of its Russian unit. Based in Rueil-Malmaison near Paris, the company made the announcement on Monday, July 4, joining several other companies leaving the Russian market to local business.
Reportedly, the company stated that it expected to write off a maximum of 300 million euros ($313 million) in net book value which is a result of this divestment. Schneider Electric stated that it is hoping for an ‘orderly transfer’ and is conducting the allocation of resources. Mainly, this is to provide support to the workers in Russia and Belarus as the transfer takes place.
A week ago, Michelin laid out its plan regarding it handing over its business in Russian to a new body under a management based locally. Specifically, they stated that they plan to carry out the transfer by the end of 2022. On the other hand, its competitor Nokian Tyres PLC similarly announced its exit from the country following escalation of tensions.
Businesses exiting the market following sanctions from the West:
For a while now, various companies and businesses from the West are looking to leave Russia owing to the war in Ukraine, which Russia refers to as a ‘special operation.’ Additionally, these companies face the possibility of a new law passing in the next few weeks which would give Moscow the power to seize assets, and initiate the imposition of criminal penalties. Notably, this particular development coming up has pushed some of the business to speed up their exit.
The largest maker spirits in the world, Diageo also decided to leave Russia, as specified in its announcement. Along with it, Kone, the Finnish elevator maker, and Finnish forestry machine manufacturer Ponsse similarly announced to leave the market for various reasons.
Not long ago, American fast food chain, McDonald’s Inc left Russia, selling its business as to a local entity. In order to retain the same staff, and give customers the same experience, the food chain remained the same in spirit. Following the completion of the sale, it was renamed as ‘Vkusno & tochko’, which translates to ‘Tasty & thats it.’
After the imposition of sanctions owing to the war in Ukraine, several other businesses also decided to leave Russia, even without selling to a local management. Some of these include Heineken, Carlsberg, Inditex, and many more.