Russia’s Woes with Wide Reaching Impact

Companies lured to Russia in recent decades by the promise of economic development are now reeling as investors consider the prospect of wider military action and economic sanctions.  Once largely closed to the outside world, the opening of Russian markets since the breakup of the Soviet Union has attracted a wide range of global companies, especially in the energy, manufacturing and consumer goods sectors.

McDonald’s (MCD, Fortune 500), for example, has more than 400 stores in Russia and an additional 73 in Ukraine. PepsiCo (PEP, Fortune 500) is another U.S.-based company with substantial operations in Russia, having spent almost $4 billion earlier this decade to acquire a local dairy products and baby food firm.  Shares of McDonald’s and Pepsi were down around 1% Monday.

Other companies, especially in the energy sector, were harder hit. Russia is one of the world’s largest energy producers, feeding much of Europe’s demand.


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