Economy: Danone sells its Russian subsidiary to a close friend of Chechen leader Kadyrov
This is the end of a series of misadventures for Danone in Russia: the French agri-food giant announced on Friday March 22 that it was going to sell its subsidiary in Russia to a businessman linked to Chechen leader Ramzan Kadyrov. The group lost control in July 2023. This transaction puts an end to a long journey in which Danone is losing ground.
The Danone company's Russian factory near Chekhov, outside Moscow, in 2017. AFP - YURI KADOBNOV
By: RFI Follow
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The information was revealed in February by the
Financial Times
, which cites a document sent to the Russian Ministry of Agriculture. The transaction is valued at 17.7 billion rubles, or 177 million euros. The total loss recognized by Danone is 1.2 billion euros.
After the start of the war in Ukraine, Danone, like other Western companies, considered suspending its activities in Russia, a market which represented 5% of its global turnover. But the company took more than seven months to initiate the process of transferring its activities.
In July 2023, there was a twist: Russia announced that it would regain
“
temporary
” control of Danone’s Russian assets
. A decision that Moscow presents as a reaction to sanctions hitting Russian companies abroad. Then, another about-face on March 1, 2024, when President
Vladimir Putin
signed a new decree canceling the control of Danone's assets by the Russian state, without any explanation.
Today, with this sale to someone close to Chechen President
Ramzan Kadyrov
, Danone is drawing a line under its Russian adventure. The group was one of the first multinationals to set up there in 1992, after the collapse of the Soviet Union.
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