Putin approves sale of Mercedes-Benz Russian finance arm

MOSCOW (Reuters) – Russian President Vladimir Putin on Monday accredited the sale of Mercedes-Benz’s native monetary companies division to Russian automobile vendor Avtodom, nudging the German automaker nearer in direction of absolutely offloading its Russian belongings.

Mercedes-Benz suspended manufacturing at its manufacturing facility in Russia and halted exports to the nation final March, and mentioned in October it could absolutely give up the Russian market, promoting stakes in its Russian belongings to a neighborhood investor.

Its exit is a part of a exodus of worldwide corporations from Russia after Moscow despatched tens of 1000’s of troops into Ukraine final February.

Beneath Russian legislation, Putin is required to approve the sale of stakes in Russian finance or vitality ventures, whereas approval from a separate authorities fee is required for offers involving companies from so-called “unfriendly” nations which have imposed sanctions towards Russia.

Putin signed an order on Monday approving the sale of Mercedes-Benz Financial institution Rus – the auto firm’s monetary companies arm in Russia – to Avtodom, which specialises in gross sales of premium automobiles.

Avtodom mentioned it now hoped to obtain permission from a separate authorities fee by the tip of February to finalise a deal for all of Mercedes-Benz’s Russian belongings, together with a manufacturing facility outdoors Moscow the place it’s going to look to revive manufacturing that was mothballed nearly a 12 months in the past.

Closely reliant on Western financing and world provide chains, Russia’s auto business has been hit laborious by Western sanctions.

Auto manufacturing slumped 67% in 2022 to simply 450,000 passenger automobiles, the business’s worst exhibiting for the reason that fall of the Soviet Union in 1991.

The phrases of the deal weren’t disclosed.

A number of Western corporations bought their Russian operations for symbolic sums, equivalent to one rouble ($0.01) or one euro ($1.08), with some including buy-back clauses to facilitate a attainable return to Russia sooner or later.