The mass corporate exodus Russia didn’t see coming
- BP exits 19.75% stake in Russian oil & gas giant, Rosneft, which accounts for around half of BP’s oil & gas reserves.
- Apple and Nike halted sales in Russia while Google and Apple removed Russian apps.
- Boeing and vehicle manufacturers like Toyota and Mazda cut shipments and support from Russia.
The Russian ruble plummeting to a record low to start March is not the only economic crisis facing the country.
Russia’s invasion of and subsequent war with Ukraine has left the Western world reeling with a number of big multinational companies taking action of their own to suspend services, sales and support of any kind through operations in Russia.
BP (LON: BP) was the first big name to announce its departure from Russia following the country’s invasion of Ukraine. BP is exiting its 19.75% stake in Russian oil giant Rosneft which accounts for around half of BP’s oil and gas reserves, and a third of its production. BP’s exit is proving costly as the oil and gas giant faces charges of up to US$25bn for its Russian departure.
Apple (NASDAQ: AAPL) and Nike (NYSE: NKE) soon followed in BP’s footsteps, announcing the suspension of sales in Russia with Apple saying it was ‘deeply concerned’ about Russia’s invasion and it “stands with those suffering as a result of the violence”.
Apple also took action to protect Ukrainians by disabling its traffic and live incidents updates in Apple Maps for the whole of Ukraine as a “safety and precautionary measure for citizens”’.
Google (NASDAQ: GOOGL) and Apple removed the apps of Russia’s state-owned media outlet, Russia Today and Sputnik from their respective mobile app stores.
Shares in Apple and Google rose 2% and 0.4% respectively after the tech giants took action to suspend Russian activity.
Boeing (NYSE: BA) joined the party on March 2, announcing it is suspending parts, maintenance and technical support services for Russian airlines. The president of Boeing in Russia said “we are One Boeing and have each other’s backs” in support of the aircraft manufacturer halting operations in the region. Boeing shares rose 1.5% after the company announced its halt in Russia.
And a number of leading global vehicle manufacturers jumped on board the Russian exodus with Toyota (TYO: 7203) halting production at its Russian factory from March 4 and will cease vehicle shipments to the country, while Honda (TYO: 7267) and Mazda (TYO: 7261) also moved to suspend shipments of vehicles to the region this week.
The long-term repercussions of invading Ukraine are not yet known from a Russian perspective, however with the list of global corporations joining the Russian exodus daily, the rebuilding of Russia’s economy will be one very costly task.
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