• Russia places Metro AG (MEO2.VI)'s Russian business under temporary administration, escalating economic retaliation against European companies.
  • The move follows similar actions against Nestlé and Auchan, as Moscow responds to EU sanctions and frozen Russian assets.
  • European businesses still operating in Russia face growing legal uncertainty and potential asset expropriation.

Kremlin Strikes Back

Russia has escalated its economic retaliation against European businesses, framing it as a response to EU sanctions, Ukraine-related military support, and the freezing of Russian state assets. The immediate, concrete development is not Germany's seizure of Russian assets, but Moscow's placement of German wholesaler Metro AG's Russian business under "temporary administration," alongside similar actions against Nestlé and Auchan.

On September 28, President Vladimir Putin ordered Metro AG's Russian assets transferred to temporary administration. The designated manager is UK Torg RUS, a Russian entity reportedly owned by Johannes Tolay, CEO of Metro's Russian business. Metro said it no longer had operational control of the subsidiary and was assessing the consequences.

Earlier in September, Russia put the Russian operations of Swiss food group Nestlé and French retailer Auchan under temporary management. Although ownership is not formally transferred under this legal mechanism, prior cases show that temporary administration can precede effective expropriation or sale to locally connected owners.

Kremlin officials have described these moves as potentially reversible, but spokesman Dmitry Peskov said Moscow currently sees "no grounds" for reversal. A senior Russian government source told Reuters European companies should "be scared," explicitly raising the prospect that other European businesses—including UniCredit (UCG.MI) and Raiffeisen (RAIFF)—could be targeted.

The headline's claim should therefore be read as political framing: Putin is portraying Russian actions as reciprocal retaliation for Western asset freezes and sanctions. Germany, however, has generally been among the major EU countries cautious about outright confiscating Russian sovereign principal, rather than simply freezing it.

Metro and Beyond

This is principally a geopolitical and sanctions story, not a single-company earnings story. Metro AG is nevertheless the clearest company directly implicated.

The German wholesale retailer, which serves professional customers such as restaurants, hotels, and small retailers, entered Russia in 2001. Metro says it operates 91 wholesale stores there and employs about 9,000 people. Its Russian assets were put under temporary administration. Metro says it has no further operational control and is assessing the effect on the parent company.

Nestlé, the Swiss global food-and-beverage group, has continued certain Russian operations, arguing that it supplies essential food products. Its Russian business was transferred to temporary control by L.E.V. Management. Nestlé has said it intends to protect its rights and preserve business continuity, particularly for employees.

Auchan, the French supermarket and hypermarket operator with a large Russian retail presence, had its Russian assets placed under the same temporary-management structure as Nestlé's. Reuters reported that Auchan had 229 Russian stores and 24,236 employees at the end of 2025.

There is no announced broad corporate restructuring at Metro AG beyond the loss of operating control of its Russian subsidiary. The operational issue is substantial: even if the legal owner nominally remains Metro, management, cash flows, strategic decisions, and eventual disposal prospects are now exposed to Russian state action.

Economic and Market Implications

The escalation increases the risk premium for any multinational still operating in Russia. It also makes an orderly exit harder: since 2022, Russia has imposed steep-discount sale requirements, exit taxes, and approval hurdles on foreign owners leaving the country; temporary administration adds a more direct state-control risk.

Russia says it is responding to approximately €210 billion of Russian sovereign assets frozen in the EU and to restrictions on Russian corporate property abroad. The wider pool of immobilised Russian sovereign assets is estimated at roughly €300 billion globally. Most of the EU-held amount is held through Belgium-based Euroclear, not Germany.

The G7 has so far agreed to use the extraordinary revenues generated by immobilised Russian assets—not the principal itself—to service and repay a $50 billion loan package for Ukraine. Direct confiscation of the principal remains legally and politically disputed.

For European companies, the immediate effect is not necessarily a group-wide revenue shock; it depends on Russia exposure. The larger concern is legal uncertainty, lost asset value, supply-chain disruption, reputational risk, and the possibility that Russian operations can be transferred to local managers or owners at below-market value.

More broadly, the dispute cuts both ways. Direct seizure of central-bank reserves could help fund Ukraine and reduce demands on European public budgets, but critics—including institutions concerned with financial stability—warn that it could erode confidence in reserve currencies and sovereign-asset protections.

Political Context

The measures sit within Russia's war against Ukraine and the EU's sanctions response. Russia's 2023 presidential decree permits assets belonging to companies from states Moscow labels "unfriendly" to be placed under temporary administration. The mechanism has previously been used against Danone (DANOY) and Carlsberg (CARL-B.CO); those cases illustrate the risk that "temporary" control becomes de facto dispossession.

EU diplomats agreed in September to renew sanctions covering roughly 3,000 Russian-linked individuals and entities for three years, while removing Alisher Usmanov and Mikhail Fridman from the list as part of the compromise.

Moscow argues that European weapons supply, intelligence support, and other assistance make European countries participants in the conflict; European governments reject that characterization and view Russia's invasion as the initiating act and its actions against foreign companies as coercive retaliation.

Germany is especially exposed politically because it is a major supporter of Ukraine and because Berlin-Moscow tensions have risen further. AP reported that Germany attributed an attempted drone incident at Leipzig/Halle Airport to Russia, shut a Russian consulate in Bonn and a Russian cultural center in Berlin, and Russia subsequently shut the German consulate in St. Petersburg. Moscow denied involvement in the alleged drone incident.

Stakeholders and Societal Impact

Russian employees and customers of Metro's 9,000-strong workforce and the customers of its wholesale stores face uncertainty over management continuity, supplier relationships, investment, and workplace protections. Metro's Russian operation has said stores and online operations continue normally for now.

European companies that remained in Russia may face pressure to reduce investment, lose autonomy, or accept distressed exits. Reuters reports that the Association of European Businesses had 330 member companies operating in Russia, down from 400 a year earlier.

European investors and lenders face potential asset writedowns, litigation costs, and reputational effects that can weigh on shareholders and creditors. Banks with Russian subsidiaries are particularly sensitive because their assets cannot be moved easily and their regulatory exposure is large.

Ukraine and European taxpayers could benefit if a stronger legal mechanism to use frozen Russian assets increases funding available for Ukrainian defence and reconstruction, potentially reducing taxpayer-funded support. But direct confiscation remains contentious precisely because of sovereignty, litigation, and financial-system concerns.

The central argument is whether Russia should fund the damage caused by its invasion, versus whether confiscating central-bank assets would breach sovereign-immunity norms and establish a precedent that could weaken confidence in European financial markets.

Historical Background

The chain of events began with Russia's full-scale invasion of Ukraine in February 2022. The EU and allied governments then froze Russian central-bank reserves and imposed broad sanctions. The EU alone immobilised approximately €210 billion under its jurisdiction, while the G7 and partner jurisdictions immobilised an estimated €260 billion, with the global total near €300 billion.

Russia responded incrementally: it made divestment by foreign owners difficult through discounts, exit taxes, and official approvals; in 2023, it created the temporary-administration mechanism for assets connected to "unfriendly" states; it used that mechanism against major Western companies, including Danone and Carlsberg; and in September 2026, it expanded the campaign to Nestlé, Auchan, and Metro amid a renewed dispute over sanctions and frozen Russian assets. Reuters cited data indicating 135 foreign-affiliated firms had been subjected to temporary administration since the war began, although other counts use narrower definitions.

The closest precedent is therefore not a traditional cross-border nationalisation treaty dispute, but Russia's post-2022 pattern of using corporate assets as leverage in a sanctions confrontation.

Outlook

In the short term, Russia is likely to preserve the present temporary-management arrangements rather than rapidly restore control to the affected European owners. Moscow calls them reversible, but its public messaging and Reuters' reporting point toward continued pressure. Companies with meaningful Russian operations may accelerate contingency planning: ring-fencing intellectual property, reassessing asset values, reviewing supply and payment routes, and negotiating potential exits. European banks—particularly UniCredit and Raiffeisen—will remain closely watched after the Kremlin-linked warning that other European groups could be targeted.

Longer term, if the EU moves from freezing Russian sovereign assets to confiscating principal, Moscow would have a stronger incentive to intensify seizures or nationalisation of Western-held assets. Yet Germany, Belgium, France, Luxembourg, and Italy have been cautious about outright confiscation, in part because of legal and financial-stability concerns. A negotiated peace arrangement could make Russian assets a bargaining instrument—possibly as collateral for reparations or a settlement fund—rather than an asset pool immediately confiscated by Europe. The European Parliamentary Research Service identifies this as one of several alternatives between doing nothing and direct confiscation.

The likely structural outcome is a more fragmented international business environment: reduced Western investment in Russia, greater reliance on domestic or non-Western ownership, and higher political-risk pricing for cross-border capital in jurisdictions involved in sanctions disputes.

The key point is that the dispute has moved beyond sanctions compliance into reciprocal asset leverage. Metro's case demonstrates that the threat is no longer hypothetical for European companies that retained a meaningful presence in Russia.

Correction: An earlier version of this article misstated the number of Metro stores in Russia. It operates 91 wholesale stores, not 90.