Companies Are Getting Out of Russia, Sometimes at a Cost (2024)

After the Russian president, Vladimir V. Putin, ordered the invasion of Ukraine on Feb. 24, multinational companies have been forced to re-examine their ties with Russia. Some, like McDonald’s, PepsiCo and Shell, had built relationships with the country over decades and were faced with untangling complicated deals.

Under pressure from investors and consumers, many Western companies have started to unwind their investments, close stores and pause sales in Russia. Some, after at first taking temporary measures, have revised their plans and decided to exit the country completely. And some that have begun the process of withdrawing from Russia have revealed the financial cost to their businesses.

Here are some of the actions businesses have announced:

Consumer goods and retail

• Adidas said it would suspend sales in Russia, cutting 1 percent from its expected revenue growth this year. The company has about 500 stores in Russia and the former Soviet states.

• British American Tobacco said its was exiting its Russian business. Philip Morris, the cigarette maker, suspended planned investments and will reduce manufacturing in Russia.

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• Canada Goose, said it would cease wholesale and e-commerce sales to Russia.

• Danone said it had begun to transfer control of its dairy business in Russia, which accounts for 5 percent of the French company’s sales, in a move it described as “the best option to ensure long-term local business continuity, for its employees, consumers and partners.” The disposal would result in a write-off of up to 1 billion euros, Danone said.

• Fast Retailing, the Japanese clothing company that operates Uniqlo, said it would suspend its operations in Russia. The company came under criticism after its chief executive, Tadashi Yanai, told an interviewer that its stores would continue selling clothes in Russia.

• H&M is shutting down its business in Russia. The fashion retailer, which had about 170 stores in Russia, paused sales in March. Now, in what the company described as a “winding down process,” the company will reopen stores for a brief period to sell the leftover inventory before exiting the country altogether.

• Ikea suspended imports and exports, though it said it would continue to operate its major chain of shopping centers, Mega, in Russia to ensure that customers have access to essentials.

• Nestlé said it was suspending sales of “the vast majority” of its prewar volume of products in Russia, including pet food, coffee and candy sold under KitKat and Nesquik brands. It had already halted “nonessential” imports and exports into and out of Russia, alongside advertising and capital investment.

• Nike said in March that it was temporarily closing its roughly 116 stores in Russia.

• TJX, the owner of T.J. Maxx and Marshalls, promised to divest its equity ownership in Familia, an off-price retailer with more than 400 stores in Russia.

• Unilever, which owns brands like Dove and Sunsilk, suspended imports and exports.

Energy

• BP said it would sell its nearly 20 percent stake in Rosneft, the Russian state-controlled oil company. It wrote off about $25.5 billion on its nearly 20 percent holding in Rosneft, along with other ventures in the country. That charge, though, is considered a paper loss by analysts, with little relevance to continuing performance.

• Exxon Mobil said it would end its involvement in a large oil and natural gas project.

• Shell planned to exit its joint ventures with Gazprom, the Russian natural gas giant. In an update to shareholders, the company said that its decision to leave Russia would cost $4 billion to $5 billion in the first quarter alone.

Finance

• American Express suspended operations in Russia and Belarus.

• Bank of America said its direct exposure to Russia was minimal after reducing its business there over more than a decade. Still, it reported that its potential exposure could reach $700 million, mostly relating to loans to nine Russian companies.

• BNY Mellon has ceased new business with Russia and “suspended investment management purchases of Russian securities,” a spokesman for the company said. It might lose as much as $200 million in revenue in 2022 as a result.

• Citigroup, which recently had about 3,000 employees in Russia, first tried to sell its consumer and local businesses, but, in August announced it would wind them down instead, closing 15 branches and laying off 2,300 employees. The decision to exit was part of a broader retreat from overseas markets announced last year, and Citi’s consumer division in Russia was already running limited operations. The wind-down will reduce the bank’s exposure to Russia by $1 billion.

• Deutsche Bank said it was “in the process of winding down our remaining business” and was helping its clients reduce operations in the country.

• Goldman Sachs said it was “winding down its business in Russia in compliance with regulatory and licensing requirements.” It was the first big American bank to exit the country. In its first-quarter earnings, it reported about $300 million in losses related to the war in Ukraine.

• JPMorgan Chase said that the bank would wind down is business in Russia and could lose $1 billion “over time” because of its exposure.

• Mastercard will prevent cards issued by Russian banks from working in other countries and block people with cards issued elsewhere from purchasing goods and services from companies in Russia.

• Société Générale, France’s third largest bank, said it would sell its controlling stake in Rosbank, a Moscow-based lender, resulting in a hit of 3.1 billion euros ($3.3 billion).

• Visa said would “cease” all Visa transactions within Russia, saying in a statement “this war and the ongoing threat to peace and stability demand we respond in line with our values.”

• Western Union said it would suspend its operations in Russia and Belarus.

• Zurich Insurance Group, Switzerland’s largest insurer, said that it had sold its Russian unit to members of its team in the country, who would operate the business independently under a new name and branding. The company said that its Russian division wrote insurance premiums worth $34 million in 2021.

Food

• Carlsberg, the world’s third-largest brewer, said it had halted investments and would stop selling its flagship beer brand in Russia before eventually announcing a full divestment from the country, resulting in a charge of $1.4 billion. The company’s Baltika Breweries unit, based in St. Petersburg, is Russia’s market leader.

• Heineken said it was getting out of Russia, at a cost of just over $400 million. That announcement came about three weeks after it said it would stop making, advertising and selling Heineken products there.

• Little Caesars is suspending all operations at Russian stores, which are owned by franchisees.

• Mars, the maker of M&M’s and Snickers, has suspended new investments in Russia.

• McDonald’s said it was selling its Russian business to a local licensee, which includes 850 restaurants, as it began a full exit from the country, which would result in a write-off of $1.2 billion to $1.4 billion. The company had said in March that it was temporarily closing its nearly 850 locations and halting operations in Russia.

• PepsiCo said it would stop selling soda in Russia but would continue to produce dairy and baby food products there, calling it a “humanitarian” effort.

• Restaurant Brands International, which owns Burger King, is ending corporate support for the roughly 800 locations operated by local franchisees in Russia, and will not approve any additional investment or expansion.

• Starbucks said it was closing its 130 stores in Russia, where it has about 2,000 employees. The exit followed an announcement in early March that it was pausing all store operations. Its locations in Russia are owned and operated by the Kuwaiti conglomerate Alshaya Group.

• Yum Brands said it would transfer ownership of its KFC restaurants in Russia to a local operator, after doing the same for its Pizza Hut restaurants. This follows the company’s announcement that it would close 70 company-owned KFC restaurants and all 50 franchise-owned Pizza Hut restaurants.

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Media

• Bloomberg suspended operations in Russia and Belarus, cutting off the countries from all Bloomberg products, including its electronic trading platforms. The move comes after the company pulled journalists out of Russia this month.

• Netflix suspended its service and halted future projects in the country.

• Sony said it was suspending operations in Russia.

• The Walt Disney Company paused the release of movies in Russia. Disney also paused all of its business operations in the country.

• Warner Bros. said it would pause theatrical movie releases in Russia.

Professional services

• The consulting firm Bain said it would not work with any Russian business and had put a policy in place in 2020 “to not work for the Russian government at any level — central, state or departmental.”

• Boston Consulting Group will not take on any new clients in Russia and has “started to wind down work where possible and will not take on any new work,” it said.

• McKinsey & Company said it would not take on any new work in Russia, would stop work for state-owned entities and “will no longer serve any government entity in Russia.”

• The Big Four accounting firms — Deloitte, EY, KPMG and PwC — are pulling out of the country.

Tech

• Amazon Web Services has stopped accepting new customers for its cloud computing services.

• Apple paused sales in Russia in March, removed two Russian state-run media platforms from the Apple App Store outside Russia and stopped all exports into its Russian sales channel.

• Cogent, which provides so-called backbone internet services, cut off access.

• Ericsson said it would suspend its business in Russia indefinitely and place its employees in the country on paid leave. It said it was setting aside about $95 million in anticipation of the financial hit from leaving Russia. The company ended deliveries to customers in Russia in February.

• Google suspended advertising, including on its search and YouTube products. YouTube said it would globally block all channels associated with Russian state-funded media, including RT and Sputnik, citing a violation of its policy of “denying, minimizing or trivializing well-documented violent events.” The company also said it would remove others’ videos about Russia’s invasion of Ukraine that violate the policy.

• IBM announced in March that it had suspended business in Russia.

• Intel said it was suspending all operations in Russia. The announcement came a little more than a month after the semiconductor company said it would stop shipments to customers in Russia and Belarus.

• LG Electronics said it was suspending shipments of its products to Russia. In a two-sentence release that did not mention Ukraine, the Seoul-based maker of televisions and appliances said it was “deeply concerned for the health and safety of all people” and would continue “to keep a close watch on the situation as it unfolds.”

• Lumen, a major American internet provider to Russia, said it was ending its business in the country.

• Microsoft said it would suspend new sales of its products and services in Russia.

• Nokia said it will leave Russia after having earlier suspended new business, stopped deliveries and moved its research and development work out of the country in recent weeks. The company said it expected its decision to leave Russia to lead to about $109 million in provisions for the quarter.

• SAP, the German software company, said it was winding down its operations in Russia after doing business in the country for more than three decades. The company said it had already halted sales in Russia and Belarus.

• Sony, which makes the PlayStation video game console, said it had “suspended all software and hardware shipments” to Russia, as well as operation of the PlayStation Store in the country.

• Uber said it was trying to “accelerate” its divestment from the Russian internet company Yandex, which operates a ride-hailing service.

Travel and logistics

• Marriott said in June that it was suspending operations because it had determined that restrictions by Western governments “will make it impossible for Marriott to continue to operate or franchise hotels in the Russian market.” Marriott had closed its corporate office in Moscow in March.

• Airbus has suspended the supply of parts, maintenance and technical support services to Russian airlines.

• Amadeus, which provides ticket sales technology to airlines, cut ties with Aeroflot, the national flag carrier and the largest airline in Russia.

• American Airlines joined other commercial carriers in suspending travel to Russia.

• Boeing said it had stopped buying titanium from Russia, a key source of the metal for the aerospace industry.

• Delta Air Lines cut code-share and interline agreements with Russian carriers.

• Hyatt suspended development work in the country. In April, it said it had stopped providing services to the owners of Hyatt hotels in Russia. “The third-party owners may continue to operate the hotels in the Russian market under the relevant brand,” it said.

• Hilton closed its corporate office in Moscow.

• FedEx, one of the world’s largest delivery services representing crucial elements of the global supply chain, also suspended shipments to Russia.

• DHL said in a statement that “inbound services to Russia and Belarus have been suspended.”

• Sabre, another company that provides booking technology for airlines, said in a statement that it was “taking immediate steps to remove Aeroflot flight content from its global distribution system.”

• United Airlines has temporarily suspended service between San Francisco and Delhi and between Newark and Mumbai in order to avoid flying over Russian airspace.

• UPS announced that it would halt delivery service to Russia.

Manufacturing

• Caterpillar, which makes construction and earth-moving equipment, said it would pause manufacturing in Russia.

• Hitachi, the Japanese industrial company, said it was suspending exports to Russia and pausing manufacturing.

• Michelin, the French tire manufacturer, said it would transfer its operations in Russia to a local owner by the end of 2022, saying it was “technically impossible to resume production, due in particular to supply issues, amid a context of general uncertainty.” The announcement came months after it had suspended manufacturing in Russia, where it employs about 1,000 people and generates 2 percent of company sales.

• Nissan, the Japanese automaker, announced its “imminent exit” from Russia by approving the sale of its operations in the country to NAMI, a Russian state-backed entity, for a nominal price. The transaction would result in a financial hit to Nissan of well over $600 million, but includes the option to buy back the Russian operations within six years.

• The French carmaker Renault said it was selling its majority stake in AvtoVAZ, Russia’s largest auto manufacturer, to the same state-backed entity as Nissan, in a deal that would give Renault the option to buy back its stake if it chooses to return to Russia. The company said it would take a $2.3 billion financial hit in the first half of the year because of the sale, and has sharply lowered its financial outlook for 2022. It had earlier said that it was halting operations at a plant in Moscow and was reassessing its partnership with AvtoVAZ.

• Siemens, the German technology conglomerate, said it was leaving Russia and would “carry out an orderly process to wind down” its business there. The company had initially announced in March that it was pausing its business in Russia and Belarus.

• Stellantis, the maker of Jeep, Fiat and Peugeot vehicles, has suspended all of its manufacturing at a plant that it operates with Mitsubishi in Kaluga, Russia, citing logistical difficulties. In March it suspended exports of cars from Russia and imports of vehicles into the country.

• Tata Steel, the India-based steel giant, said it would stop doing business with Russia and would source “alternative supplies of raw materials to end its dependence” on the country.

• Volvo said it was setting aside about $423 million to make up for losses it anticipated in the first quarter because of Russian exposure. The carmaker has suspended “all sales, service and production” in the country, the company said.