“Leroy Merlin wants to leave Russia with as few assets as possible lost”

by time news

After having maintained his activity in Russia since the invasion of Ukraine by the Russian army, Leroy Merlin will leave the country. The Mulliez family, through the Adeo holding company, announced on Friday March 24, “his intention to cede control” of its activities in Russia to local partners. She wants so “preserve the jobs of the 45,000 employees and sustain the company’s activity”. The company does not want to be expropriated and seeks to lose as few assets as possible. Russia, where the brand opened its first store in Moscow in 2004, accounts for nearly 20% of its turnover (5 billion euros), the largest outside of France.

Read also: Article reserved for our subscribers The Mulliez in Russia, a “success story” in troubled waters

The pressures were not lacking. A month after the invasion of his country, the Ukrainian president launched an appeal during a videoconference with French parliamentarians: « Renault, Auchan, Leroy Merlin and others must stop sponsoring Russia’s war machine, stop financing the murder of children and women, rapes”. Volodymyr Zelensky did not win the case of these big brands, any more than their employees in Ukraine.

The group had suspended any new investment from February 2022. It says it has initiated discussions to sell its 113 stores ” for many months “. Without obtaining a response from the special commission responsible for studying the situation of companies in the “enemies”, he says. He doesn’t want to leave with heavy losses, or cede his brand like McDonald’s did to an oligarch. The 230 Auchan hypermarkets (more than 10% of its turnover), also owned by the Mulliez, continue their activity. Although the brand has contributed to Moscow’s war effort by collecting products for the army, according to information from the Monde denied by Auchan.

Also listen How Auchan and Leroy-Merlin contribute to Vladimir Putin’s war

first employer

Before the war, French multinationals, including thirty-five CAC 40 companies, were the largest foreign employer in Russia with 160,000 employees. But to leave is to die a little or totally. Renault and Societe Generale paid a high price for this departure: 2.3 billion euros for the car manufacturer and 3.3 billion for the bank. As for TotalEnergies, it had to depreciate 15 billion dollars of assets. Other major French brands, such as Bonduelle or Lactalis, remain active in Russia.

A majority of Western companies continue their business, or suspend their activity while waiting for a bitterly negotiated solution with the authorities. A year ago, 2,405 subsidiaries owned by 1,404 companies from the European Union and the G7 were active in Russia, underline Simon Evenett (University of Saint-Gall) and Niccolo Pisani (IMD in Lausanne); at the end of November, only 8.5% had sold at least one.

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