French agribusiness Danone said on Friday it plans to transfer control of its key dairy and plant-based business in Russia, keeping only its infant formula division.
One of the few multinationals to remain in Russia since the Ukraine war, Danone said the move to “transfer effective control” of the dairy business could result in a write-down of up to a billion euros ($980 million). .
The arm has so far accounted for five percent of Danone’s net sales in 2022.
“Danone believes this is the best option to ensure long-term local business continuity for its employees, consumers and partners,” the group said in a statement.
The transaction is subject to regulatory approvals, the group added.
However, Danone will maintain the activities of its specialty foods business, which includes infant milk.
“Danone’s priority remains to act responsibly and respectfully towards its local employees, consumers and partners throughout the process,” Friday’s statement said.
In March, the French group announced it would continue operations in Russia, where it employs 8,000 people, as many international companies had ceased operations in Ukraine following the invasion of Moscow.
But Danone spoke of “extremely tense” operating conditions in Russia and Ukraine in July.
– Multinational Exodus –
A large number of large Western companies have pulled out of Russia in an exodus since Moscow invaded its pro-Western neighbor on February 24.
Starbucks and McDonald’s were among the American corporations that announced their exit.
McDonald’s – which had employed 62,000 workers in Russia – was bought by Russian businessman Alexander Govor and renamed “Vkusno i tochka” (“Yummy. Point”).
Starbucks’ Russian operations were also purchased and reopened with a new name and logo.
Denmark’s Lego, the world’s largest toymaker, said in July that it would “indefinitely halt” commercial operations in Russia and end its partnership with the retail group, which operated 81 stores on behalf of the brand.
French automaker Renault left the country in May, handing over its assets in the country to the Russian government.
Other companies shedding their business in Russia include clothing brands Nike, Adidas and H&M, Swedish furniture giant Ikea and US tech giant Cisco.
