In 2024, the total deal value related to the exit of foreigners from Russian assets amounted to $3.38 billion, down from $11.14 billion in 2023, according to the M&A market report by agency AK&M (available to RBC).

The number of transactions also fell — from 97 deals in 2023 to 58 in 2024, analysts estimate. The highest number of foreign exit deals were in construction and development sectors — 13 asset sales totaling $724.8 million — and machinery manufacturing with 10 deals totaling $478.5 million.

“The most active foreign investors leaving the Russian market in 2024 were from France (nine asset sales), Germany (eight deals), the United States (seven transactions), the UK and Austria (four each), as well as Japan, Sweden, and China (three each),” the report states.

The aggregate value of M&A deals (transactions over $1 million) on the Russian market reached $54.3 billion in 2024, up from $50.7 billion a year earlier. However, the number of deals declined from 536 to 499, per AK&M data. The average deal size — excluding mega deals over $1 billion — fell by 6.6% year-on-year to $58.5 million.

Reasons Behind the Slowdown in Foreign Exits

The volume and count of buyouts of Russian assets from foreign owners have been shrinking for the second consecutive year. Key factors include a reduced supply of such businesses following mass exits after Russia’s military actions in Ukraine in February 2022 and a series of tightening conditions for foreign investors wishing to leave Russia. The latest tightening took place in October 2024, when a government subcommittee on foreign investment control increased the exit contribution from 15% to 35% of the asset’s market value and raised the discount applicable to buyouts from 50% to 60% (meaning the maximum possible deal value is 40% of the market value).

“Despite the significantly increased cost of financing such deals, interest among Russian investors remains strong, partly due to often sizable cash balances on the books of the foreign companies being acquired,” notes Yulia Zagornova, partner at B1.

In 2025, at least in the first half of the year, the number of deals is expected to continue declining because the new stricter conditions were only agreed upon late in 2024, believes Leonid Nikitin, head of Blaze Consulting.

“Another factor is that foreign assets are now transferred under temporary management without formal expropriation but with actual alienation of former owners’ control and use rights. This makes transactions with such assets impossible,” the A&M report says.

In March 2024, the government approved a list of economically significant organizations (ESO) subject to a procedure of “relocation” within Russia by suspending foreign holding companies’ corporate rights. Relevant ministries can petition arbitration courts to suspend foreigners’ rights in these companies; if approved, non-residents lose voting rights at shareholders’ meetings, dividend receipt, and control over shares and stakes in ESOs. Companies such as Azbuka Vkusa, X5, Rusagro, and Akron have already undergone this “forced redomiciliation,” mainly involving a change in jurisdiction for companies controlled via foreign structures by resident owners. The ESO list is periodically expanded; for example, three more companies were added in late January 2025.

Another reason for the slowdown is the lack of exit intentions among foreign companies still operating in Russia. “Many foreign companies remaining in Russia do not plan to leave the market and do so only under strong pressure from their home governments,” the AK&M report notes. The 2025 outlook remains uncertain: under Donald Trump’s presidency in the U.S., some companies may gain “political cover” to stay, while others might find opportunities to exit, Reuters reported. Some companies engaged in sales talks have already paused negotiations due to potential geopolitical improvements, says Sergey Nunuparov, managing director at PSK-Solutions.

High interest rates are also slowing M&A activity. The Bank of Russia’s key rate rose from 16% to 21% in 2024, while many deals relied on debt financing, Nunuparov adds. “Banks are less willing to provide M&A loans due to tighter capital regulations and increased risks on existing borrowers, prompting more cautious lending,” he explains.

What’s Changing in the M&A Market

Growth in deals involving closed-end mutual funds (ZPIFs) and an increase in company nationalizations have become key trends in 2024, according to AK&M.

In 2024, 13 transactions involved buyers who were ZPIFs rather than specific individuals or groups. The total value of these deals reached $7.41 billion. The largest M&A deal on the Russian market was among these — a $5.29 billion purchase of Yandex assets by a consortium of investors (ZPIF Consortium.Perviy).

Experts highlight several advantages of such deals. First, ZPIF shareholders remain anonymous, helping owners avoid sanctions. Second, structuring assets via ZPIF facilitates smooth business succession.

The rising popularity of ZPIFs in Russia is also due to restrictions on foreign trust structures previously used in deals, adds Dmitry Garaev, partner at Kept and head of M&A tax services. ZPIFs can also offer tax benefits in some cases.

There is a growing trend of private deals with undisclosed buyers and funding sources, with ZPIFs as the main vehicle, confirms Svyatoslav Safronov, analyst at Aspring Capital. “This trend will likely continue until major sanctions are lifted,” he believes.

“We expect more deals involving ZPIFs, observing their increased registration with the Bank of Russia in recent years. This may reflect expectations of intensified sanctions and the convenience of consolidating assets under a single umbrella,” agrees Mikhail Ilyanovich, CEO of General Invest.

Regarding nationalizations, AK&M recorded ten court-ordered nationalization deals exceeding $1 million each in 2024, with a total value of $3.89 billion. Analysts note more nationalizations may have occurred, but some were non-cash or court valuations distorted market value.

RBC, February 13, 2025