Mercedes-Benz to give up Russian market, promote shares to native investor By Reuters

BERLIN/MOSCOW (Reuters) – Mercedes-Benz mentioned on Wednesday it could withdraw from the Russian market and promote shares in its industrial and monetary providers subsidiaries to a neighborhood investor, changing into the most recent carmaker to exit the nation.

Japan’s Nissan (OTC:) this month took a $687 million loss in handing over its enterprise in Russia to a state-owned entity for one euro, mirroring an earlier transfer by Renault (EPA:) which bought its majority stake in Russia’s Avtovaz for one rouble.

Mercedes-Benz Russia mentioned shares within the native subsidiaries can be bought to automobile vendor chain Avtodom.

Mercedes Chief Monetary Officer Harald Wilhelm, whereas presenting third-quarter outcomes, mentioned the transaction was not anticipated to provide rise to any additional important results in terms of the group’s profitability and monetary place past these reported in earlier quarters.

“Closing completion of the transaction is topic to the authority’s approval and the implementation of contractually agreed circumstances,” he added.

Each Nissan and Renault included six-year buyback clauses. Russia’s Vedomosti each day cited a supply as saying that the Mercedes deal might embody an analogous clause.

A Mercedes spokesperson mentioned the corporate’s 15% stake in Russian truckmaker Kamaz wouldn’t be affected by the supposed transaction and ought to be transferred to Daimler (OTC:) Truck this 12 months as deliberate.

Avtodom mentioned it could choose a expertise accomplice to proceed working the manufacturing amenities on the Esipovo industrial property northwest of Moscow, the place Mercedes-Benz has a manufacturing plant.

“The principle priorities in agreeing the phrases of the transaction have been to maximise the fulfilment of obligations to purchasers from Russia each by way of after-sales providers and monetary providers, in addition to preserving jobs of staff on the Russian divisions of the corporate,” Natalia Koroleva, CEO of Mercedes-Benz Rus, mentioned in an announcement.

Mercedes suspended manufacturing in Russia in early March.

The Affiliation of European Companies (AEB) mentioned 9,558 Mercedes automobiles have been bought in Russia from January to September, down 72.8% from a 12 months earlier.