Is Russia Open for Business — and at What Cost?
Investors seem open to the prospect of peace talks, but Western companies face a dilemma just three years after many retreated from the country.
By Andrew Ross Sorkin Ravi Mattu Bernhard Warner Sarah Kessler Michael J. de la Merced Lauren Hirsch Edmund Lee and Alan Blinder
Feb. 19, 2025
The return of Western businesses would be an enormous lift to President Vladimir Putin of Russia. But would they dare risk it?
We’re taking a look at President Trump’s plans to consolidate control over many of the agencies that oversee business, including the S.E.C., the Federal Trade Commission, the Federal Communications Commission and the National Labor Relations Board.
For years, industry has complained about the alphabet soup of agencies, which often compete with one another. Some officials argue that is a feature, not a bug, while others have called for a complete rethinking of the regulatory apparatus in the country. What do you think?
Meanwhile, President Trump is expected to speak on Wednesday at the Saudi-hosted FII Priority conference in Miami Beach, the event that’s increasingly a gathering of power players including Ken Griffin of Citadel, Dara Khosrowshahi of Uber and Masa Son of SoftBank. DealBook’s Lauren Hirsch will be reporting on the ground there and we’ll bring you the latest Thursday morning.
“Incredible opportunities
”Frozen out of potential Russia-Ukraine peace talks, European leaders are either feeling dazed or are fuming. But investors are feeling increasingly optimistic about the prospects of the nearly three-year war ending, especially as President Trump indicates he may meet with President Vladimir Putin of Russia this month.
One big question is how corporate leaders feel about U.S. and Russian officials signaling that Russia may reopen to Western businesses. Concerns like the future of Western sanctions on Moscow remain unresolved, while companies may still feel burned by their hasty and costly exodus from the country.
Ties are certainly frayed, especially after
Putin essentially seized the Russia operations of companies including Carlsberg and Danone. “Carlsberg Group has divested its Russian business, and there are no plans to return,” Kenni Leth, a spokesman, told DealBook’s Bernhard Warner.
Danone declined to comment.
That reluctance contrasts with statements by the Trump administration. Secretary of State Marco Rubio spoke bullishly on Tuesday about rebuilding economic ties with Moscow, mentioning “ incredible opportunities that exist to partner with the Russians.”
Another participant in the talks, Kirill Dmitriev, the head of Russia’s sovereign wealth fund, said he saw some U.S. businesses returning by next quarter. (A return of Western businesses could transform Putin’s wartime economy.)
Markets seem somewhat open to the idea. The Stoxx Europe 600 index and the DAX, a collection of German blue-chip companies, both hit another record on Tuesday. (A caveat: Those were driven partly by soaring defense stocks, as investors plan for European military spending to ramp up.) Last week saw the biggest weekly inflow into European stocks in over two years, according to analysts at Citigroup.
Not even the threat of a worsening of U.S.-European relations — including potential tariffs of around 25 percent on automobiles and semiconductors — appears to be denting that ebullience.
But the risks may still be too high for most Western companies, Holger Schmieding, an economist at Berenberg, told DealBook. “Western firms will not engage in a grand scale in Russia,” he predicted, beyond resuming limited exports to Russian consumers or trading for the country’s raw materials.
There is also a very real concern that Trump could cut a bad deal that imperils the security of Ukraine and its neighbors. “It might tax the cohesion of the E.U. even more than the euro crisis of 2010-12,” Schmieding said.
Trump remains a wild card in all of this, he added: “U.S. companies may be encouraged by Trump” to return, he said.
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HERE’S WHAT’S HAPPENINGElon Musk is reportedly seeking to raise money for X at a $44 billion valuation. The effort would value the social network at the same price that Musk paid for it in 2022, according to Bloomberg. That represents a win of sorts for the billionaire, who saw the company dip in value as advertisers fled the site — only for his business fortunes to rebound as he gained influence in the Trump administration.
Silver Lake is said to weigh a bid for Intel’s Altera unit. Shares in the company soared on Tuesday after Bloomberg reported that the private equity firm was nearing a bid for a majority stake in the business, which makes multiuse chips and which Intel acquired in 2015 for $17 billion. Intel’s future remains uncertain as rivals consider buying other pieces of the company, moves that could ultimately see the chipmaker split into pieces.
BlackRock reportedly cancels company meetings after new S.E.C. guidance. The investment management giant halted its consultations after new agency rules that broaden the definition of investors seeking to influence corporate behavior. (Semafor was first to report the development.) The S.E.C. guidance was meant to stymie activism tied to environmental, social and corporate governance issues, but is increasingly seen as affecting investor behavior well beyond that.
New details emerge about President Trump’s fund-raising from health care executives. The president has told associates that he collected millions from the leaders of drugmakers, health insurers, hospitals and more who paid to attend dinners with him before his inauguration, according to The Wall Street Journal. The industry’s efforts to gain Trump’s ear come as Robert F. Kennedy Jr., the health secretary, prepares potentially vast changes to regulation.
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Trump goes after independent agenciesPresident Trump’s campaign to raze and reshape the federal bureaucracy found a new focus on Tuesday: bringing independent agencies like the S.E.C. more firmly under the White House’s command.
The move may fulfill a long-held aim of conservatives. But the further centralizing of power could transform Washington into a less predictable and more politicized place than corporate America had perhaps expected.
Independent agencies must now run potential regulations past the White House, according to an executive order that Trump signed on Tuesday. The order also reiterated the president’s assertion that the Office of Management and Budget has the power to block their spending on initiatives he disagrees with, running counter to the Impoundment Control Act of 1974.
It also stipulated that they must abide by his and the Justice Department’s interpretation of the law, even in lower courts, further removing their ability to act independently.
Affected agencies include the S.E.C., the Federal Trade Commission, the Federal Communications Commission and the National Labor Relations Board.
Especially concerning to some is that it also applies in part to the Fed — though only to the central bank’s supervision of financial institutions, not to monetary policy. But Trump has previously made clear that he feels free to weigh in heavily on the institution’s interest rate decisions.
Some constitutional experts say this further crosses a legal line. Trump has already fired the heads of several independent agencies, in violation of congressional statute. And he has already declared the Impoundment Control Act unconstitutional, saying that he doesn’t have to follow it.
Making these agencies beholden to the president makes it more likely that regulation will be more politicized and prone to swing from administration to administration.
What does this mean for business? At the least, agencies like the F.T.C. and the F.C.C. — already set to be controlled by appointees ideologically aligned with Trump — will be further tied to the president’s wishes.
It also introduces additional unpredictability to an already unpredictable administration. Consider that the F.T.C. and the Justice Department’s antitrust division said that they would maintain Biden-era merger review guidelines that business executives have deplored.
But the move is consistent with the executive order in one respect: Trump is keeping a firm hand on the wheel when it comes to corporate oversight.
- In other government news: A federal judge declined a request by 14 state attorneys general to temporarily bar Elon Musk’s cost-cutting initiative from gaining access to data at several federal agencies. The Musk team claimed to have saved $8 billion in one contract — a figure that was way off. And Trump suggested that federal agencies should negotiate bills rather than repay them in full.
“The calendar just went from fully booked to being wide open in a span of like three weeks.”— Phil Haslett. The founder of EquityZen, a site that helps private companies and their employees sell their stock, says that the dearth of I.P.O.s can be partly attributed to companies in wait-and-see mode on President Trump’s economic policies.
A Trump-brokered golf truce?The Saudi-backed LIV Golf league swaggered its way into the sports world in 2022 with huge contracts for established stars and a shorter, livelier format that challenged the PGA Tour. But it also effectively split golf’s stars across two circuits, fracturing the audience and weakening the business prospects for both leagues.
Now President Trump is seeking to play peacemaker as the two sides are exploring a deal under potentially friendlier terms that would have most likely been a nonstarter under a Biden Justice Department, DealBook’s Lauren Hirsch and The Times’s Alan Blinder are the first to report.
A recap: The two sides began secret talks in April 2023 to create a partnership but couldn’t get past a pivotal hurdle: Biden administration regulators. Soon after Trump returned to the White House, he conducted an Oval Office meeting that ethics experts have said tested the bounds of propriety, but that also sped along a possible accord.
Deal terms are still in flux, including LIV’s fate. The two sides are now looking beyond a simple cash transaction, and the PGA Tour commissioner, Jay Monahan, has said they are looking at a “reunification.” There are still many complicating factors, including how to value both ventures.
And there’s also the matter of how to handle any deal alongside a separate $1.5 billion investment in the PGA Tour by John Henry, Arthur Blank and other American sports magnates that the tour raised as it faced pressure from the Saudis.
The negotiations offer a hint of what deal making might look like under Trump. The president’s antitrust leadership has indicated that it may not take quite the freewheeling approach many on Wall Street expected.
That means that those seeking regulatory approval may soon see a divergence: deals that Trump supports and those he does not. The latter may be in for a bumpier ride than expected.
https://www.nytimes.com/2025/02/19/business/dealbook/russia-business-peace-talks.html |
