This Automaker Sold Its Russian Business For 1 Euro

Due to the war in Ukraine, many companies around the world have exited their Russian businesses.

One global automaker sold off its Russian business for a price that resembles something you would find at a yard sale.

What Happened: Companies such as McDonald’s Corp MCD have sold off their Russian units and taken losses on their investments.

Automaker Nissan Motor Co Ltd NSANY announced the exit of its Russian operations under the Nissan Manufacturing Russia LLC to NAMI, the Central Research and Development Automobile and Engine Institute.

The sale includes manufacturing facilities and sales centers in several Russian cities.

The sale price was reported as 1 euro, or around 98 cents.

Nissan will take a “one-off impact” of around 100 billion yen, or around $680.5 million from the exit.

“On behalf of Nissan, I thank our Russian colleagues for their contribution to the business over many years. While we cannot continue operating in the market, we have found the best possible solution to support our people,” Nissan President and CEO Makoto Uchida said.

Related Link: SEC Demands Additional Information On Russian Business Exits From Companies 

Why It’s Important: Like many other global companies, Nissan previously suspended its operations in Russia back in March.

Nissan gets the option to buy back its Russian business within the next six years, similar to the approach McDonald’s made with its sale.

The automotive company may have taken care of a major overhang with the Russian business. Many companies shut down operations in Russia and continued to pay employees, leading to write-offs and one-time fees in quarterly reports.

With the sale process now coming to a close, Nissan could eliminate this problem. While selling a business unit for 1 euro sounds like a horrible problem, it may have been in the best long-term interests of Nissan and its shareholders.

The sale also comes after Russia changed its trademark policies that stated assets and businesses in the country could potentially be taken for free. In the case of Nissan, the sale gets completed, employees are taken care of and it has the option to re-enter the country in the future if political tension dies down. 

Nissan reported it remained on track to hit its business objectives laid out under the Nissan NEXT transformation plan.

Photo: Nissan Qashqai via Nissan