The negotiation track between Russia and the USA gives handle for optimistic forecasts regarding the return of departed companies to the Russian market. However, experts believe that this will not happen quickly despite the politically favorable terms. The reasons are both economic and legal. Viktor Mironov, TEAM Managing Partner, comments on the prospects for the return of companies that had included call options when making exit deals in an article for Delovoy Petersburg.
Decisions whether to include call option provisions in an exit deal mostly depended on the business sector and the time when a foreign company was leaving Russia. Call options were particularly common at the start of exodus, especially among investors who actually had not wanted to leave and hoped that the situation would have retuned back to normal soon.
Call options, usually made in under pretty straightforward terms, give the seller the right to repurchase shares, at its seller’s discretion, before expiration of a set time period. A call option may be 'conditional’, i.e. establish triggers which give right to exercise the option, such triggers may relate to both the business itself (changes in turnover) and external factors (the imposition or lifting of sanctions).
This practice was soon restricted by the Government Commission for Monitoring Foreign Investments in the Russian Federation, and many investors had to act on the go-go-go principle. In 2024, permits for exit deals including call options provisions were given by the Governmental Commission in exceptional cases only.
If the international policy climate changes, returns can be expected primarily in the consumer sector, where minimal investment is required. Western brands are still appreciated by consumers and can easily regain their niches, especially in the middle and upper segments. In the B2B sector, it is much more complicated: it will be extremely difficult for Western manufacturers to win back Russian customers who have been already "taken away" by Asian suppliers.
Intellectual property protection is a significant problem for the return of foreign companies as well. Parallel import practices introduced due to the absence of rights holders on the market saved Russia from product shortage. However, parallel imports do not fit long-term strategies of brand owners. Even if the Russian Government returns to the rights holders protection policies, it will take a long time to ‘close all the windows’ and withdraw 'gray’ goods from circulation. Without this, there is no reason to expect serious investments in the market.