Since the invasion of Ukraine in February 2022, Russia has been steadily seizing both foreign and domestic businesses, placing them under “temporary management.” While the Kremlin insists these takeovers are temporary, experts and affected business owners suggest otherwise. Many fear the assets are being permanently reallocated to politically connected individuals.
Western firms, including Danish brewer Carlsberg, Finnish energy company Fortum, and French food giant Danone, have lost control of their Russian operations. The latest to be seized is Glavprodukt, Russia’s largest canned food producer, which was owned by the U.S.-based Universal Beverage.
How Russia Seizes Companies
The Russian government has used several methods to take control of businesses, including:
- Presidential Decrees – Companies are placed under “temporary management”, effectively stripping owners of their rights.
- Forced Sales – Firms are pressured into selling their stakes at below-market prices to government-approved buyers.
- Court Rulings – Assets of both foreign and domestic businesses are transferred to the state through legal proceedings.
- Retaliation for Western Sanctions – Russia is preparing new laws allowing it to seize U.S. and European assets in response to the freezing of Russian assets abroad.
Glavprodukt: A U.S.-Owned Company Taken Over
In October 2024, three men walked into Glavprodukt’s Moscow headquarters, announcing that a new director general had been appointed by Rosimushchestvo, Russia’s federal property agency.
Glavprodukt’s founder, Leonid Smirnov, who now lives in the United States, was stunned.
“They have completely taken away my control of my company,” he told Reuters.
Soon after, Russia’s corporate registry showed that the ownership had transferred to the Russian government, despite official claims that the seizure was only temporary.
Western Firms Face Permanent Losses
Several Western companies have already suffered irreversible losses:
- Carlsberg tried to sell its stake in Baltika Breweries in June 2023, but Russia intervened three weeks later. The company was later forced to sell to local buyers for a steep discount.
- Danone and Fortum had their Russian subsidiaries taken over and handed to Kremlin-approved managers.
- Uniper, a German energy firm, has had its Russian power plants under state control for nearly two years.
The Impact of Russian Takeovers
The seizures have not necessarily benefited the businesses.
- Glavprodukt’s output and sales have dropped by 10% since the takeover.
- Suppliers and buyers have cut ties, and yearly bonuses have been stopped.
- The new management is consolidating the company’s three factories under a single chain of command, a move Smirnov believes is a step toward a forced sale at a reduced price.
“When managers are appointed for political loyalty rather than competence, the company’s value and performance inevitably suffer,” said Septimus Knox, Director at S-RM Risk Consultancy.
Russia Expands Business Seizures Beyond Foreign Firms
It’s not just foreign companies that are affected. In January 2025, the Russian government took control of several major domestic businesses, including:
- A leading grain trader
- Domodedovo Airport, one of Moscow’s biggest airports
- Multiple strategic warehouses
Will Western Firms Ever Recover Their Assets?
Despite Moscow’s claims that it expects U.S. companies to return, no Western firms have announced plans to resume business in Russia.
Additionally, new Russian laws are being prepared to confiscate U.S. and European assets to compensate for Russian properties frozen abroad.
With little legal recourse and continued geopolitical tensions, experts believe these business seizures are effectively permanent.
Russia’s seizure of foreign and domestic businesses shows no signs of reversing, despite claims that these takeovers are temporary. While politically connected insiders benefit, affected companies are suffering from declining sales, operational disruptions, and forced sales at undervalued prices.
As Western sanctions remain in place and Russia retaliates by seizing more assets, the chances of foreign businesses recovering their lost properties appear slim. Whether this aggressive nationalization strategy strengthens or weakens Russia’s economy in the long run remains to be seen.
