Danone is reportedly planning to sell its operations in Russia to local dairy group Vamin Tatarstan. The French company is said to be set to sell its business in the country to the Russian cheese and butter maker for Rbs17.7bn ($191m), according to a letter viewed by The Financial Times.
The owner of Vamin Tatarstan, Mintimer Mingazov, has agreed to pay Rbs10bn to Danone for its equity and Rbs7.7bn to go towards debt servicing. These reports have emerged a day before Danone is due to release its 2023 annual results.
Last July, the Kremlin seized Danone’s Russian operations, with the stakes of the company being put under the “temporary management” of Rosimushchestvo, the national government property agency. The Kremlin appointed Chechnya’s minister for agriculture, Yakub Zakriev, to manage Danone’s Russian branch.
Vladimir Putin brought in new laws in April 2023 that allowed the government to seize assets from businesses that it deemed “unfriendly”. Moscow took charge of the local operations of Danone and Danish brewer Carlsberg in July.
Later in the month, Danone asserted its legal ownership over the assets taken over by Russia. In a statement released by Danone in July, the Alpro producer stressed the majority of its affected assets centred on its Essential Dairy and Plant-Based (EDP) division.
At the time, the company said it would “deconsolidate” the assets, which resulted in cash impairment charges of €200m ($216m).
The following September, Danone Russia was re-branded to H&N (standing for health & nutrition) and all its products have been sold under the new brand since that period.
When asked for comment, Danone responded, “Since the announcement, our focus was to ensure the safety of our people while protecting Danone’s assets and rights. Given the uncertainty and volatility of the situation, we can’t comment further.”
