German chemical industrial group Henkel leaves Russia. However, the company agreed with the buyers on the option of repurchasing its business in Russia, said the financial director of the group, Marco Svoboda. Other major foreign players adhere to a similar scheme.
Last week, on April 20, Henkel completed the sale of its Russian assets to a consortium of local financial investors. Among the buyers are the structure of the owner of the drug manufacturer Pharmstandard Viktor Kharitonin Augment Investments, Ivan Tavrin’s investment company Kismet Capital Group and the company of the founder of the Elbrus Capital investment fund Dmitry Kryukov Elbrus Services. The deal amounted to 600 million euros, or about 54 billion rubles.
The company’s chief financial officer, Marco Svoboda, told Reuters that Henkel would retain a buyback option. He did not specify how long it will take.
Henkel has been operating in Russia since 1991. The company produced cleaners and detergents under the brands Laska, Persil, Losk, Pemolux, Vernel and others. Russian business brought the group more than one billion dollars annually.
After the events of February 2022, Henkel’s management decided to curtail the company’s activities in the Russian Federation. The withdrawal from the local market was announced last April. In December, Henkel spun off the local business into an independent company, Lab Industries. The latter has been operating independently since January 1, 2023.
ajar door
Henkel is far from the only foreign company that has sold its Russian business, reserving the right to repurchase. Previously, this scheme was used by the French brand of natural cosmetics and perfumery L’Occitane, the American chain of fast food restaurants McDonald’s Corp., car brands Renault, Nissan, Mazda, Mercedes-Benz, electronics and household appliances manufacturer Electrolux and others.
A reverse option is a contract under which its holder (often the founder of the company) acquires the right to acquire (for a fee or free of charge) a share in an LLC from a business partner (investor or co-founder) upon the occurrence of certain conditions fixed in the contract. In this way, the foreign owner can distance himself from the local business without losing ownership.
Buyers of such assets can be divided into three categories: Russian strategic investors (companies and individuals), investors from friendly countries and local management.
Rejection in one form or another of “toxic” Russian assets has become a defining trend in the behavior of foreign investors in the past year. Leaving the country with the right to return in the future through an “ajar door” in the form of a reverse option is just one of the survival strategies popular among foreign companies in the face of geopolitical tensions, sanctions and complicated logistics.
Some players decided to act more radically: they sold all their Russian assets and severed relations with local business partners. According to the press secretary of the President of the Russian Federation Dmitry Peskov, there are about 120 such organizations in total (before the start of the NWO, there were about 1,400 foreign companies in the country).
Others, on the contrary, began to aggressively seize the empty market. This, in particular, is about Chinese manufacturers of equipment and cars. Many even decided to continue working in the Russian Federation as before, as it was before February 2022.
