A few weeks ago, Obi boss Haub was already counting on an expropriation in Russia. Apparently out of fear of this scenario, the group is giving away its Russian branches to an investor. Brand expert Kilian hopes that Obi’s way out will not catch on.
The Obi brand is history in Russia: The hardware store chain sells its 27 Russian branches and does not get any money for it. “All legal entities were transferred to an investor without payment of the purchase price,” the company said.
According to brand expert Karsten Kilian, the fact that no market price was obviously achievable could be related to the fact that the Russian branches are still connected to mortgages or that all employees have been taken over. He also points out that it is unclear what condition the building fabric of the branches is in. “It is clear, however, that the Obi branches would certainly have had a value in ‘normal times’,” says Kilian ntv.de. How much Obi will have to write off for the assets is not known. The only fact is that the hardware store chain loses five percent of sales due to the complete withdrawal from Russia.
Even if the approval of the responsible authorities is still pending: Under the new owner, the Obi brand will not be continued in Russia. Obi has “taken the final step to finally exit the Russian market,” the chain said. All markets in Russia had already been closed in mid-March because of the Ukraine war, and now the Obi Group is “neither directly nor indirectly active in Russia” after the most recent transaction.
In an interview with Manager Magazin, owner Christian Haub already referred to the Russian law that allows the state to expropriate companies whose home countries are participating in the sanctions imposed because of the Ukraine war. He should therefore have expected an expropriation in Russia. For moral reasons, after the Russian attack, Haub could not imagine continuing to do business in Russia and thus indirectly supporting the regime there financially.
Treasury pays part of the Obi exit
According to brand expert Kilian, with this step, Obi has lost the option of being able to sue for repossession later. “After all, Obi only agreed to the donation on the condition that the brand will no longer be used in Russia in the future, in order to avert possible damage to the German hardware store brand.”
Kilian hopes that Obi’s path will not set a precedent in the future. “Honestly, I don’t hope that gifting of assets will be copied because it’s a well-known fact that a gift tends to make the recipient richer.”
Even if the name of the Russian investor is not known, according to Kilian, in this specific case it could possibly be an oligarch, but maybe also previous managing directors or managers. “This would mean that one or more wealthy Russian citizens would benefit from the war, which was definitely not the purpose of Obi’s withdrawal,” says Kilian. After all, Putin and the upper and middle classes should be weakened – and not given more assets.
By writing off the Russian branches, the German treasury receives less tax and, according to Kilian, pays part of Obi’s exit from Russia in this way. “In the end, we all pay for the radical exit because there are fewer taxes that sooner or later someone else will have to pay.”