Topline
French carmaker Renault has sold its Russian assets to the Russian government, the company announced Monday, the first major nationalization of a Western company’s assets since Moscow threatened to punish those leaving the country over Russia’s invasion of Ukraine.
Renault sold its Russian assets.
Key Facts
Renault will transfer its entire stake in Renault Russia to the city of Moscow and its majority holding of nearly 68% in carmaker Avtovaz to NAMI, a government-backed science institute.
There are no conditions on the sale and all approvals have been acquired, Renault said.
The deal, which includes a six-year option for the carmaker to buy back its stake in Avtovaz, the maker of iconic Soviet brand Lada cars, effectively marks the first major nationalization of a Western company’s Russian assets since Moscow invaded Ukraine in late February.
The deal included a major factory owned by Renault, which Moscow’s mayor, Sergei Sobyanin, said would be listed as the city’s asset and resume production under the Soviet-era Moskvitch brand.
Renault CEO Luca de Meo said the decision was “difficult but necessary” and the “responsible choice” towards the company’s 45,000 employees in Russia.
Renault and NAMI did not immediately respond to Forbes’ request for comment.
What We Don’t Know
The value of the deal. Renault did not disclose the financial details of the sale, which have been reported to be for the “symbolic” value of one ruble. Renault already announced a 2.2 billion euro hit to write down the value of its Russian businesses to zero in late March when it suspended manufacturing at its Moscow plant.
Key Background
Renault’s Russian exit marks a major shift in the auto industry for Russia and abroad. Russia was the second-biggest market for Renault—which is partly owned by the French state—and the company was one of the most heavily exposed Western carmakers to the Russian market, while Avtovaz is Russia’s largest carmaker. It is one of many large Western companies to write down billions of Russian assets after suspending, shifting or halting operations following Moscow’s invasion of Ukraine, including giants in finance and energy. Russian President Vladimir Putin has vowed to retaliate against the companies leaving Russia, including threatening to nationalize their assets.
Further Reading
Russia plans to seize assets of western companies that pull out (Guardian)
Source: https://www.forbes.com/sites/roberthart/2022/05/16/renaults-russian-assets-nationalized-after-carmaker-sells-to-moscow/