Quitting Russia Won't Be Easy

The rapid withdrawal means companies may not recoup the value of their abandoned operations

When the Soviet Union collapsed in 1991, companies rushed to plant their flag in Russian soil. Icons of capitalism—including Apple, McDonald’s, and Adidas—went on to build profitable businesses in the ensuing years as consumers clamored for a slice of Western lifestyle. Now, in just a few short weeks, those long-standing ties have unraveled.

Russian President Vladimir Putin’s invasion of Ukraine on Feb. 24, set off a mass corporate exodus, starting with BP Plc and quickly gathering pace as dozens of global brands followed. The chaotic unwinding has left companies wondering how they’ll compensate workers and pay for assets left behind, and if they can recoup the value of their abandoned businesses in what has suddenly become the world’s most sanctioned nation.

With the legal status of the assets in doubt— Russia has said it might nationalize businesses left behind—it could take years for companies to return, if ever. Preparing for a second act in Russia comes with huge unknowns, including how long sanctions might remain in place, the logistical and financial challenges of rebuilding an operation, and the consumer backlash, both by Russians who might feel abandoned by their cherished brands and by those who don’t want to be complicit in financing Putin’s war machine. Andrew Forrest, the chairman of Australian iron ore producer Fortescue Metals Group Ltd., put it bluntly: “If you’re making a dollar from Russia right now, I’d call it blood money.”