Putin approves sale of Mercedes-Benz's Russian financial arm

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Putin approves sale of Mercedes-Benz's Russian financial arm

MOSCOW - Russian President Vladimir Putin on Monday approved the sale of Mercedes-Benz's local financial services division to Russian car dealer Avtodom, bringing the German automaker closer to fully offloading its Russian assets.

Mercedes-Benz suspended production at its factory in Russia and halted exports to the country last March, and said in October it would completely quit the Russian market, selling stakes in Russian assets to a local investor.

Its exit was part of a flurry of global companies from Russia after Moscow sent tens of thousands of troops into Ukraine last February.

Under Russian law, Putin is required to approve the sale of stakes in Russian finance or energy ventures, while approval from a separate government commission is required for deals involving firms from so-called unfriendly countries that have imposed sanctions against Russia.

Putin signed an order on Monday approving the sale of Mercedes-Benz Bank Rus - the auto company's financial services arm in Russia to Avtodom, which specialises in sales of premium vehicles.

Avtodom hopes to get permission from a separate government commission by the end of February to finalise a deal for all of Mercedes-Benz's Russian assets, including a factory outside Moscow, where it will try to restore production that was mothballed almost a year ago.

Russia's auto industry is hit hard by Western sanctions because it is heavily reliant on Western financing and global supply chains.

In 2022, the industry's worst showing since the fall of the Soviet Union in 1991, decreased by 67% to just 450,000 passenger cars, the industry's worst showing since the fall of the Soviet Union in 1991.

The terms of the deal were not disclosed.

A rouble $0.01 or a euro $1.08 was sold by several Western companies for symbolic sums, such as a rouble or euro $1.08 with some adding buy-back clauses to facilitate a possible return to Russia in the future.