Photo: EPA
1 March 2025, Berlin – Russian oligarchs Boris and Arkady Rotenberg, who are close to Vladimir Putin, are interested in buying the assets of the German construction concern Knauf in Russia. This was reported by the German business publication WirtschaftsWoche (WiWo), citing sources.
Knauf on the way out of Russia: Conflicts within the company
Knauf announced its decision to leave the Russian market back in April 2024 following a scandal when journalists found out that the company’s cement was being used to build residential buildings in occupied Mariupol. Since then, the company has been in confidential negotiations to sell its Russian business, which includes 14 plants and more than 5,000 employees. In 2023, Knauf’s sales in Russia reached €1.3 billion.
The situation with the exit from the Russian market caused a split within the company. Former Knauf CEO Nikolaus Knauf, who had been developing business in Russia since the 1990s and even served as Russia’s honorary consul in Germany, insisted on keeping the company’s assets in the country. At the same time, some of the company’s owners insisted on selling because of the risks to Knauf’s core business in the United States. They feared that ties with Russia could lead to sanctions and problems with the US government.
The Rothenbergs, Gazprombank and the risk of US sanctions
According to WiWo, Boris and Arkady Rotenberg are interested in buying Knauf’s assets, but they are not negotiating directly, but through Gazprombank, which is to act as an intermediary in the deal.
This could be a problem for Knauf, as the Rothenbergs are under sanctions from the US, EU and UK. If the US sanctions authority OFAC (Office of Foreign Assets Control) believes that Knauf is collaborating with Russian oligarchs, the company risks losing its US business.
Part of the Knauf family is strongly opposed to a deal with Russia, fearing sanctions. However, another faction within the company insists that the deal should include a buyback right if a peace agreement is reached between Russia and Ukraine in the coming years.
Knauf’s official position: confidentiality and compliance with sanctions
At WirtschaftsWoche’s request, Knauf replied that the process of withdrawal from Russia is going according to plan, but the details remain confidential.
“We are working hard to implement our decision to exit the Russian market, which we announced last year. All necessary steps must remain confidential. Please understand that we cannot comment further on this. Of course, we always comply with the law and applicable sanctions,” the company spokesperson said.
What’s next?
The decision to sell Knauf’s Russian assets has not yet been made, but a deal with the Rothenbergs could pose a political and financial risk to the German group. If OFAC deems the transaction to be a violation of sanctions, Knauf risks losing its key positions in the US market, which could lead to serious financial losses.
The situation around Knauf’s withdrawal from Russia remains uncertain, and a potential deal with Russian oligarchs could be a new challenge for European companies trying to distance themselves from the Russian market.
