The group will transfer its activities of dairy products and of vegetable origin, that is to say 90% of its turnover in the country. The bill could reach 1 billion euros.
After TotalEnergies, Société Générale or Renault, a new French giant is preparing to leave Russia. This Friday, almost eight months after the Russian offensive in Ukraine and the first Western sanctions against Moscow, the French champion of dairy products and infant nutrition Danone announces its decision “to initiate the process of transferring control of its dairy and plant-based business” in the country. Either the upcoming sale of a division which represents 90% of its local activity, and 7,000 of its 8,000 Russian employees. This decision marks the end of a Russian adventure begun by Danone some thirty years ago.
«Danone believes that this is the best option to ensure the long-term operational performance of this activity, in the interest of its employees, consumers and partners.“, explains Danone in a press release. Until then, the group with 24.3 billion euros in turnover, which does 5% of its business in Russia, had announced its intention to maintain its activities in the country, continuing to market first-class products there. necessary, but by freezing all investments there. From the beginning of the spring, faced with the stalemate in the conflict, he had however explained “leaving all the options on the table” on the continuation of his presence in the country.
Several exit scenarios
In fact, after an eighth package of European sanctions adopted in early October against Moscow, this decision was made almost mandatory by the impossibility of continuing to operate in the country, according to an internal source. “The EDP activity has a dilutive contribution to the like-for-like sales growth and to the group’s operating marginadds Danone’s press release.
From sale to a local player to transfer to management, the exit process could still take several forms. Already, the French giant estimates at one billion euros the amount of the maximum depreciation that it could record in its accounts following this exit. Beyond dairy and vegetable products, Danone will continue to market infant nutrition products in the country for the time being. A branch that weighs less than 10% of its activity in the country.
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