Putin will give the state a “super-preferential right” to buy the business of companies leaving the Russian Federation

Russia will get a “super preferential right” to buy shares of companies leaving the Russian Federation. President Vladimir Putin is preparing such a decree, Interfax writes, citing a source familiar with the draft document.

“The right of pre-emption of shares of the Russian Federation is exercised independently of the right of pre-emption of other persons,” the decree specifies.

The document will change Putin’s previous decree of August 5, 2022, which was directed against energy companies from “unfriendly countries”. At that time, Russia introduced a ban on the sale of companies and banks owned by shareholders from “unfriendly countries”.

According to the new decree, Russia will have a “right of pre-emption” to receive shares of companies included in the list of strategic enterprises and strategic joint-stock companies.

In mid-June, the Financial Times reported that Vladimir Putin had drafted a secret decree demanding a law giving the state priority to buy up Western companies’ assets “at a significant discount.”

Russia has made it much more difficult for foreign companies to leave its market. Earlier, the authorities introduced a ban on selling business to foreigners without the consent of the government’s foreign investment commission. The sale price must be at least half the market price, and another 5 or 10% of the real value (depending on the size of the discount from the market price) must be transferred to the state.

In addition, the process of nationalization of Western business has actually begun in the Russian Federation. So, in July, Putin signed a decree transferring the Russian subsidiary of the French Danone holding company to external management. As a result, it was headed by the nephew of the head of Chechnya, Ramzan Kadyrov, Yakub Zakrev. The same decision was made in the case of Baltica, owned by the Danish Carlsberg. Its new president was Putin’s friend, Taimuraz Bolloev. Earlier, the Russian “daughter” of the Finnish energy company Fortum was de facto nationalised.