President Vladimir Putin has allowed the acquisition of BASF Vostok by a domestic enterprise
Russian President Vladimir Putin has approved the acquisition of BASF Vostok by Lakra Sintez, a domestic manufacturer of paints and varnishes. The company was a subsidiary of German-based chemical giant BASF, which withdrew Russia in 2022 due to the Ukraine conflict.
Lakra Sintez was granted the right to buy out 100% of the shares of BASF Vostok under a presidential decree that introduced special measures in response to the “unfriendly actions of some foreign states and international organizations,” a document published by the Russian government says.
The decree was signed by Putin in 2022 and envisaged various measures ranging from the acquisition of foreign assets by Russian companies to their temporary seizure by state agencies. The latter measure is applicable if the assets are deemed critical for the country’s energy security.
The move was a response to similar actions by Western nations, including Germany and Poland. In June 2022, the German authorities took over Gazprom Germania. In November, Warsaw seized Gazprom’s 48% stake in the EuRoPol GAZ joint venture, owners of the Polish portion of the Yamal-Europe pipeline. The Polish subsidiary of Novatek, which dealt in liquefied natural gas and other hydrocarbons, was also seized.
The company which is set to purchase BASF Vostok, Lakra Sintez, calls itself the nation’s biggest paintwork materials producer. It owns a number of paintwork and construction materials brands.
BASF is the world’s biggest chemical company, with its revenue accounting for $94.83 billion in 2023, according to the German Statista online data gathering platform. The conglomerate employs 112,000 people around the world and has production facilities in 234 locations worldwide, according to its own data.
In March 2022, BASF announced its plans to leave Russia and Belarus, citing the conflict between Moscow and Kiev. The company said it “strongly condemns the Russian attack on Ukraine” at that time. In its statement, the chemical producer also said that “Russia and Belarus accounted for around 1 percent of BASF Group’s total sales” in 2021.
In 2023, the company revealed that it had to take some €7.3 billion ($7.9 billion) in write-downs because of its oil and gas subsidiary – Wintershall Dea – exiting Russia. The move was expected to push it to a full-year net loss of nearly €1.38 billion ($1.48 billion), AP reported at that time.
The German company itself had a history of questionable business practices. Its predecessor, IG Farben, which was created through “BASF’s merger with five other companies,” was actively involved in the production of infamous Zyklon B gas used in mass murder of people in the Nazi death camps.
BASF still maintains on its website that the IG Farben leadership, including the future board chairman of the re-established BASF, were unaware of “the misuse of pesticides for industrial mass extermination.”
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