Russian companies have made $180bn in deals globally in the past two years, providing steady profits to London bankers, lawyers, and image crafters as the city has become a hub for such transactions. Sanctions being imposed by the U.S. and European Union threaten that business.
Bloomberg reports that the potential fallout highlights the web of connections linking Russia to the global financial system. Since many large Russian companies are controlled by the state or by billionaires with close ties to President Vladimir Putin, even narrowly targeted sanctions could hurt their global operations.
A reminder of the stakes emerged on March 16th, when L1 Energy, an investment vehicle backed by Russian billionaire Mikhail Fridman, agreed to buy Dea, the oil and gas unit of Germany’s RWE, for $7.1bn -- the biggest Russia-related deal this year.
'There’s a huge amount of business, both industrial and financial, in both directions between the West and Russia', said Dominic Sanders, a partner in Moscow at law firm Linklaters. 'The further the sanctions and retaliation go, the greater the pain'.
Putin today said he would support a plan for Ukraine’s Crimea region to become part of the Russian Federation after a referendum Western leaders condemned as illegitimate.
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