France’s Danone exits Russia with €1B write-off

Danone is seeking a Russian buyer for its dairy business in a deal that could result in a write-off of up to €1 billion.

The French food company said Friday it plans to “initiate a process to transfer the effective control” of the business, which made up around 5 percent of Danone’s revenue in the first nine months of 2022.

“Danone considers that 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 move is not a complete withdrawal from Russia as Danone will retain its infant nutrition arm.

The company, which entered the Russian market 30 years ago, suspended investment in Russia after Moscow’s invasion of Ukraine in February. The decision to shed its main Russia-based business marks the latest in a series of expensive exits from the country by global companies. Fast food chain McDonald’s and American coffee giant Starbucks both pulled out in May.

Consumer goods companies have come under pressure to cease their operations in Russia, with some shoppers and activists calling for boycotts of those still operating in the country. Sanctions applied by the EU and the U.S. have also made it harder for companies to carry on business as usual.

Danone did not disclose who will take over the business, which owns Russia’s top dairy brand, Prostokvashino. The transaction will be subject to the approval of authorities, the statement said.