Get 40% Off
👀 👁 🧿 All eyes on Biogen, up +4,56% after posting earnings. Our AI picked it in March 2024.
Which stocks will surge next?
Unlock AI-picked Stocks

Putin approves sale of Mercedes-Benz Russian finance arm

Published 02/06/2023, 07:51 AM
Updated 02/06/2023, 10:59 AM
© Reuters. FILE PHOTO: The Mercedes-Benz logo is pictured at the 2019 Frankfurt Motor Show (IAA) in Frankfurt, Germany, September 10, 2019. REUTERS/Ralph Orlowski/File Photo

MOSCOW (Reuters) - Russian President Vladimir Putin on Monday approved the sale of Mercedes-Benz's local financial services division to Russian car dealer Avtodom, nudging the German automaker closer towards fully offloading its Russian assets.

Mercedes-Benz suspended production at its factory in Russia and halted exports to the country last March, and said in October it would fully quit the Russian market, selling stakes in its Russian assets to a local investor.

Its exit is part of a exodus of global companies from Russia after Moscow sent tens of thousands of troops into Ukraine last February.

Under Russian law, Putin is required to approve the sale of stakes in Russian finance or energy ventures, while approval from a separate government commission is required for deals involving firms from so-called "unfriendly" countries that have imposed sanctions against Russia.

Putin signed an order on Monday approving the sale of Mercedes-Benz Bank Rus - the auto company's financial services arm in Russia - to Avtodom, which specialises in sales of premium vehicles.

Avtodom said it now hoped to receive permission from a separate government commission by the end of February to finalise a deal for all of Mercedes-Benz's Russian assets, including a factory outside Moscow where it will look to restore production that was mothballed almost a year ago.

Heavily reliant on Western financing and global supply chains, Russia's auto industry has been hit hard by Western sanctions.

Auto production slumped 67% in 2022 to just 450,000 passenger cars, the industry's worst showing since the fall of the Soviet Union in 1991.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

The terms of the deal were not disclosed.

Several Western companies sold their Russian operations for symbolic sums, such as one rouble ($0.01) or one euro ($1.08), with some adding buy-back clauses to facilitate a possible return to Russia in the future.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.