Mercedes includes buyback option as Russian assets sale given official approval By Reuters

(Reuters) – The German automaker said on Wednesday that Mercedes-Benz has agreed to an option to buy back its Russian assets, the sale of which has now received official approval, bringing its exit from Russia a step closer.

Mercedes, which halted exports to Russia and domestic manufacturing in early March 2022, last year agreed to sell shares in its industrial and financial services businesses to domestic auto dealer chain Avtodom.

Deals leaving Russia by Western companies from so-called unfriendly countries – those that have imposed sanctions against Russia – need approval from a government committee. Companies often list buyback clauses that you might someday see back.

Mercedes said it intends to withdraw from the market and that the sale of shares in its subsidiaries to Avtodom has now been approved.

“The completion of the transaction is now subject in particular to the implementation of the contractual agreements,” Mercedes said in a statement. We strive for speedy implementation.

“We agreed with the buyer on an option whereby we can buy back the companies’ shares if the sanctions are lifted again,” he added.

The buyback clause was a particularly popular option as automakers exited the market in response to Russia sending tens of thousands of troops into Ukraine in February 2022.

France Renault (EPA:) sold its majority stake in Russia’s AvtoVAZ for just one ruble, but with an option for six years to buy it back. Nissan of Japan (OTC:) handed over its business in Russia to a state-owned entity for one euro.

A Russian corporate registry showed that Avtodom became a 100% stakeholder in Mercedes-Benz Capital Rus and Mercedes-Benz Manufacturing Rus on April 18.

Interfax quoted Avtodom as saying that the deal with Mercedes is not finalized and that serious work with government agencies is underway to close the deal.

Avtodom did not immediately respond to a request for comment.