Major Corporations “Returning Home” Again As Geopolitical Tensions Rise

Didi Delisting

As geopolitical tensions seem on the rise across the world, a new trend is emerging. A number of publicly-traded companies have announced plans to essentially “go back home.” One of the latest such firms is the Chinese ride-hailing company Didi (DIDI).

Didi has announced it secured shareholder approval to delist its shares in the US, which trade on the New York Stock Exchange. Didi first went public in the US just under a year ago. Reports indicate there’s concern Didi’s information on traffic flows and geography could put China’s national security at risk. Didi reportedly plans to pursue a listing in Hong Kong.

US Coffee and Burgers

Amid disagreements between Beijing and Washington, DC, no one event is more connected to the corporate-relocation trend than Russia’s invasion of Ukraine. One of the latest companies to announce it will suspend operations in Russia is Starbucks (SBUX). Citing the invasion, the company says it will close 130 licensed cafes after 15 years in business there.

Starbucks has joined companies like ExxonMobil (XOM) and British American Tobacco (BTI) in pulling out of Russia. McDonald’s also recently disclosed similar plans, separating from 62,000 employees.

Sold To Siberia

McDonald’s opened their first location in Moscow in 1990, and eventually grew its Russian business to around 850 locations. After the invasion of Ukraine, the fast food giant announced it would be suspending operations at its stores in Russia. Now, the company is selling its stores there to a Siberian franchisee, Govor, in a deal valued between $1.2 billion and $1.4 billion. The locations will operate under a different brand name going forward.

McDonald’s owned close to 84% of the locations operating in Russia, increasing the company’s sales, but clearly increasing its risk during times of turmoil. CEO Chris Kempczinski mentioned the humanitarian crisis caused by the war in Ukraine in a letter announcing the deal. For McDonald’s and other companies, geopolitical tension is an obstacle that means more than just supply chains and inflation.

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James Flippin ABOUT James Flippin James Flippin is the son of a financial advisor who grew up hearing and learning about bond yields, interest rates, the stock market, and the ins and outs of Wall Street. After stints as a licensing and business broker for Marcus and Millichap in New York City, James moved into broadcasting and became a reporter and anchor. He covered crime, politics, finance, and tech at NBC News Radio while working part-time as a producer for SiriusXM. James graduated from the University of Delaware with a bachelor’s degree in political science and economics. He's also an accomplished podcaster with over 10-years of experience.

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