President Vladimir Putin has signed a decree returning Ariston’s Russian subsidiary to its original Italian owners, marking the first time that Moscow has ended the external management of a seized foreign company without a forced sale. This decision, following months of high-level lobbying by Italian officials, is seen as a potential olive branch to other Western companies, signaling that they could also find a path back into the Russian market.
As reported by the Financial Times, Ariston Thermo Rus, a subsidiary of the Italian heating systems maker Ariston, had been seized by the Kremlin in 2022, along with several other Western assets, following the imposition of sanctions in response to Russia’s invasion of Ukraine. The business, which has operated in Russia for nearly five decades, was handed over to Gazprom, Russia’s largest gas producer. This seizure sparked outrage in Italy, with the government in Rome and the European Union condemning the move as politically motivated and retaliatory.
However, in a surprise turn of events, Putin’s decree on March 26 saw the business returned to Ariston, restoring full ownership and operational control to the Italian company. Italian officials, including diplomats and business leaders, played key roles in securing the reversal, navigating through complex negotiations. While the return of Ariston’s subsidiary marks a rare instance of a foreign business regaining control of its Russian assets, the move also serves as a signal to other Western companies that Russia may be open to their return — under strict conditions.
“Russia is sending a message that it’s now or never for Western businesses looking to return,” said one Western businessman with close ties to Russian officials. While no major foreign companies have yet announced plans to return, Moscow’s efforts to pave a path for their re-entry are evident, with Putin suggesting that any businesses looking to re-establish themselves in Russia would need to provide “guarantees of conscientious and responsible conduct.”
In the wake of Ariston’s return, Russia’s government has also floated the idea that returning businesses may be required to form joint ventures with Russian partners, further complicating the process for foreign firms. However, the Kremlin has yet to see a rush of companies eager to re-enter the market. According to Ivan Chebeskov, Russia’s deputy finance minister, there have been no official applications from foreign businesses seeking to return.
Despite the cautious optimism surrounding the return of Ariston’s Russian operations, the broader business climate remains uncertain. “The impression that everything is back to business as usual is far from reality,” said Steven Dashevsky, chief investment officer at D&P Advisors. He added that while some foreign representatives have been spotted in Moscow, including those from major commodity firms, they do not expect a significant influx of foreign investment into Russia, especially from publicly listed U.S. companies that took heavy losses when they exited the country.
Italian Prime Minister Giorgia Meloni’s government had protested against the original seizure of Ariston’s operations, citing the action as a politically motivated attempt to retaliate against Western sanctions. However, the Italian government has expressed satisfaction with the return of the company’s assets, viewing it as a sign of Russia’s willingness to honour past investments.
Ariston’s owner, Paolo Merloni, expressed gratitude for the return of the subsidiary, calling it “a recognition of decades of investment and responsible management” in Russia. Merloni also affirmed that the company would continue to operate in Russia in compliance with both Western sanctions and local laws. Whether this decision will be enough to inspire other foreign companies to follow suit remains to be seen.
As of now, the prospect of a broad return of foreign businesses to Russia remains uncertain, and many companies are still cautiously monitoring the situation. For now, Moscow’s reopening of the door to foreign companies hinges on their willingness to navigate strict and often unpredictable conditions set by the Kremlin.
