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Danone: Sale of Russian business to businessman linked to Chechnya

Photo: Kristina Kormilitsyna / SNA / IMAGO

Danone is apparently planning to sell its dairy and plant-based products business in Russia to a Chechnya-linked businessman. This emerges from a report in the Financial Times. Dairy company Vamin Tatarstan, owned by businessman Mintimer Mingasov, has agreed to pay 17.7 billion rubles (180 million euros) to take control of Danone's Russian business, according to the Financial Times Citing a corresponding letter.

In July last year, Yakub Zakriyev, a nephew of Chechen leader Ramzan Kadyrov, was appointed as the new head of Danone's Russian subsidiary. "Although Danone no longer has control over the management of its operations in Russia, the group remains its legal owner," the company said at the time. Mingasov was appointed to the company's board after Zakriyev took control, the report said, citing documents and people familiar with the situation.

Danone will receive ten billion rubles (100 million euros), while 7.7 billion rubles (79 million euros) will be used to service the Russian entity's debts, the paper also reported. The French group, which reports full-year 2023 results on Thursday, declined to comment.

In retaliation for sanctions against Russian companies following Moscow's invasion of Ukraine, the Kremlin placed the company and the Russian Carlsberg subsidiary under receivership last year. Danone then estimated the need for write-downs on its Russian activities at around 700 million euros. The group had previously warned that a sale of the unit could lead to a write-down of up to one billion euros.