Russia has progressively taken operational control of 135 companies linked to international groups away from foreign owners. Nestlé, Auchan and Metro are the latest names to enter the perimeter of the temporary administration ordered by Moscow: a measure that does not automatically equate to nationalization, but allows the Russian authorities to entrust the management of company assets and activities to local entities.
For European multinationals the risk is real: losing decision-making power, not being able to transfer profits, devaluing investments and accepting a sale under highly penalizing conditions. Ownership may formally remain in the hands of the foreign group, while its economic value and effective control are progressively compromised. This is the mechanism that has transformed the Western capital remaining in Russia into an asset that is increasingly difficult to govern, sell or recover.
What does control over 135 foreign companies mean
The number requires clarification. These are not necessarily 135 different multinationals already nationalized, but Russian corporate entities affiliated with foreign groups and subjected, since the beginning of the war, to forms of temporary administration.
The same multinational can control multiple operating companies, factories or commercial structures. Also for this reason, the available reconstructions present different numbers depending on whether international groups or individual legal entities registered in Russia are counted.
The main instrument used is Presidential Decree 302 of April 2023. The provision allows the temporary entrusting of shareholdings and activities attributable to entities from countries considered “hostile” to an administrator chosen by the Russian authorities.
| Situation | Formal property | Operational control | Possibility to sell |
|---|---|---|---|
| Ordinary activity | It remains with the foreign group | It remains at the parent company | Possible, in compliance with the rules |
| Temporary administration | It can formally remain with the owner | Move to the subject indicated by Mosca | Severely limited |
| Authorized sale | Pass to the buyer | Passes to new owner | Subject to discount and permits |
| Nationalization | It is transferred to the State | It is exercised by the State | The previous owner loses the asset |
The difference is significant on a legal level, but may be less clear from an economic point of view. A company that retains the shares of the subsidiary, without being able to appoint directors, decide on the strategy or freely use the profits, maintains a formal right whose effective value has been drastically reduced.
Nestlé, Auchan and Metro: the latest cases
In September, Moscow extended the mechanism to three leading European groups. Nestlé has officially confirmed that its Russian business has been placed under external administration and announced that it is evaluating the situation and possible initiatives to protect its rights.
A few days later it was Metro’s turn. The German group explained that the formal ownership of the subsidiary has not changed, but that operational control has been transferred to UK Torg Rus. The company manages 91 sales points in Russia and employs around 9 thousand people.
| Group | Village | Presence in Russia | Immediate consequence |
|---|---|---|---|
| Nestle | Swiss | Food production and distribution | External administration and loss of operational control |
| Auchan | France | 229 stores and approximately 24 thousand employees | Management transferred to a Russian administrator |
| Meter | Germany | 91 sales points and around 9 thousand workers | Operational control entrusted to UK Torg Rus |
| Danone | France | Dairy production | Previous temporary administration and subsequent transfer |
| Carlsberg | Denmark | Local breweries and brands | Control stolen and exit negotiated after litigation |
Because so many companies remained in Russia
The permanence did not always depend on a choice favorable to Moscow. Selling factories, warehouses, business networks and thousands of business relationships takes time. In some sectors, such as food and pharmaceuticals, there is the added need to guarantee products considered essential.
Companies had to evaluate opposing costs: remaining meant exposing themselves to sanctions, reputational damage and Russian retaliation; exiting meant accepting high losses, finding an approved buyer and getting the green light from the authorities.
Meanwhile, conditions have become more severe. According to Unctad’s Investment Policy Monitor, the sale of assets by investors from countries considered hostile may require:
- an assessment carried out according to approved procedures
- a mandatory 60% discount on the estimated value
- a contribution to the Russian budget equal to 35% of the market value
- presidential authorization for operations exceeding 50 billion rubles.
Discount and contribution must not be added mechanically to calculate how much the seller has left, because calculation bases, payment methods and conditions may vary. The result, however, is clear: exiting Russia may mean recovering only a very limited part of the original investment.
The hidden cost in the balance sheets of multinationals
Temporary administration does not only result in the loss of a factory or a commercial network. The consequences can cut across numerous budget items.
| Financial effect | How it can emerge in the accounts |
|---|---|
| Devaluation of assets | Reduction in the value of factories, brands and shareholdings |
| Loss of goodwill | Write-off of goodwill attributed to Russian activity |
| Profits blocked | Profits not transferable to the parent company |
| Currency risk | Loss of capital value expressed in rubles |
| Forced sale | Sale at a price much lower than book value |
| Litigation | Legal costs without guarantee of recovery |
| Operational interruption | Loss of supplies, licenses, technologies and support |
Already in 2023, the direct losses incurred by European companies due to closures, sales and write-downs in Russia were estimated at at least 100 billion euros.
The figure does not fully measure lost future earnings, lost market share or the cost of rebuilding production capacity elsewhere. For many companies, the economic damage can therefore exceed the devaluation formally recorded in the financial statements.
Russian assets frozen in Europe are another matter
Moscow presents these initiatives as a response to Western sanctions and the immobilization of Russian assets. The two phenomena, however, should not be confused.
Approximately 210 billion euros of Russian Central Bank assets are tied up in the European Union. These are predominantly sovereign reserves, not the usual private subsidiaries of Russian companies. European measures prevent their use and allocate part of the extraordinary proceeds to support Ukraine, according to the sanctions framework published by the Council of the European Union.
The temporary Russian administration, however, targets private companies and transfers the management power of their activities to subjects chosen by Moscow. There is a political relationship between the two events, but not a perfect legal or financial equivalence.
The risk for UniCredit and for Italian companies
Among the names that ended up in the debate also appears UniCredit, present in Russia through AO UniCredit Bank. No decree transferring control of the subsidiary has been announced and, at present, UniCredit is not among the companies subject to temporary administration.
His name emerged when a Russian government source, asked about possible next targets, responded by evoking a risk also for UniCredit and the Austrian Raiffeisen. It is not an official announcement nor the confirmation of a decision already made, but it demonstrates how the presence in Russia has also become a negotiating tool.
The reduction of UniCredit’s Russian exposure has long been at the center of relations between the bank, Italian and European authorities, as also emerged in the discussion on golden power and UniCredit’s exit from Russia.
For Italian companies still present in the country, the new step introduces a further risk: it is no longer enough to evaluate revenues, demand and sanctions. An economic value must also be attributed to the possibility that management is taken away without an immediate transfer of ownership.
What can happen to the remaining companies
The temporary administration is described by the Kremlin as reversible. In theory, control could return to the original owner. Precedents show, however, that the outcomes can be very different.
| Scenario | Possible consequence |
|---|---|
| Return of control | The parent company regains management, but after losses and interruptions |
| Prolonged administration | Ownership remains formal while economic value deteriorates |
| Negotiated sale | The company exits accepting deep discounts and imposed conditions |
| Extension of measures | New European groups are affected |
| Nationalization | The State formally acquires the assets |
The most likely scenario is not necessarily immediate, collective nationalization. Moscow can gain political and economic pressure by keeping assets in an intermediate zone: formally private, but no longer governed by foreign shareholders.
It is precisely this ambiguity that makes the mechanism effective. The owner cannot consider the investment definitively lost, but neither can he use it freely. It thus remains exposed to the costs, devaluations and negotiations necessary to try to recover it.
The real message sent to investors
The squeeze doesn’t just affect Nestlé, Auchan or Metro. It indicates that, in a market affected by geopolitical conflict, property rights can rapidly lose part of their value if they are not accompanied by effective control and the possibility of repatriating capital.
Since 2022, Russian authorities have acquired or subjected to restrictive measures assets worth approximately 7,600 billion rubles, almost 90 billion dollars, including Russian and foreign assets. The top management of the state bank VTB itself recognized that uncertainty over property rights is influencing entrepreneurs’ choices and propensity to invest.
For multinationals, the Russian case therefore changes the way of calculating country risk.
Foreign capital in Russia has not necessarily disappeared from balance sheets. A part, however, remained trapped between formal ownership, political control and increasingly expensive exit options.
