Putin threatens to nationalise Ikea and H&M

Russia has threatened to punish Western companies who withdraw from the country: the Russian stores and production facilities of, say, H&M or Ikea could be nationalised and fall into the hands of Putin or his cronies.

Will Russia play hard ball?

The Russian government is responding to sanctions and boycotts imposed by Western countries and companies following the Russian invasion in Ukraine. Since the outbreak of the war, many large Western companies have withdrawn from the country (be it temporarily or not). Among them are also numerous retailers, from Ikea over H&M to McDonald’s. These companies from “hostile states” – as Putin dubs most other countries nowadays – could now lose their Russian properties.

A bill has been approved in parliament to take ownership of all companies that is owned by a “hostile” foreign country for more than 25 %, Reuters reports. It would mean that all property and production units on Russian soil could be nationalised: the assets would then be put into a new company, the shares of which would be auctioned.

Vague threats

Only if the companies resume their Russian activities within five days, or sell their shares themselves, they can escape this nationalisation campaign, a report from Putin’s party suggests. “This will avoid bankruptcies and save jobs,” the report said cynically.

ING’s chief economist Peter Vanden Houte doubts it will really come to that. The threat would mainly apply to companies that permanently leave Russia, he explained in Belgian newspaper De Tijd. Very few companies have already announced such radical steps: although brands such as Volkswagen, Apple, Ikea, McDonald’s and H&M are explicitly named on the Russian list, they are currently only talking about a temporary suspension of activities. “Russia will not forcibly nationalise companies,” Vanden Houte believes. Although Putin has recently shown that he is more unpredictable than most people believed…