© Reuters. FILE PHOTO: The Mercedes-Benz logo is seen on a car at a new Mercedes-Benz plant’s cornerstone laying ceremony in the town of Esipovo outside Moscow, Russia, June 20, 2017. REUTERS/Tatyana Makeyeva
(Reuters) – Mercedes-Benz has agreed on a buyback option for its Russian assets, the sale of which has now been granted official approval, the German carmaker said on Wednesday, bringing its exit from Russia one step closer.
Mercedes, which suspended exports to Russia and local manufacturing in early March 2022, last year agreed to sell shares in its industrial and financial services subsidiaries to a local car dealer chain Avtodom.
Deals to leave Russia by Western companies from so-called unfriendly countries – those that imposed sanctions against Russia – need approval from a government commission. Companies often insert buyback clauses that could one day see them return.
Mercedes said it intended to withdraw from the market and that the sale of shares in its subsidiaries to Avtodom had now been granted approval.
“The completion of the transaction is now particularly subject to the implementation of the contractual agreements,” Mercedes said in a statement. “We strive for a quick implementation.
“We have agreed an option with the buyer, according to which we could buy back the shares in companies if the sanctions are lifted again.”
The buyback clause has been a particularly popular option with carmakers exiting the market in response to Russia sending tens of thousands of troops into Ukraine in February 2022.
France’s Renault (EPA:RENA) sold its majority stake in Russia’s Avtovaz for reportedly just one rouble, but with a six-year option to buy it back. Japan’s Nissan (OTC:NSANY) handed over its business in Russia to a state-owned entity for one euro.
A Russian register of companies showed that Avtodom had become the owner of 100% stakes in Mercedes-Benz Capital Rus and Mercedes-Benz Manufacturing Rus on April 18.
Interfax quoted Avtodom as saying that the deal with Mercedes was not yet finalised and that hard work with government agencies was underway to close the deal.
Avtodom did not immediately respond to a request for comment.