Danone Explores Sale of Russian Operations: Financial Times
Source: The DairyNews
French dairy conglomerate Danone is reportedly in the process of divesting its Russian business, with plans to sell to a businessman associated with Chechnya, according to the Financial Times.
Following Moscow's temporary control of Danone's Russian operations in recent months, Vamin Tatarstan, owned by entrepreneur Mintimer Mingazov, is set to acquire Danone's Russia business for 17.7 billion roubles (€180 million), as disclosed in a letter.
Of the total amount, Danone will receive 10 billion roubles (€100.2 million) for its equity, while the remaining 7.7 billion roubles will be allocated to service debt within the Russian unit. Danone, which is scheduled to unveil its full-year 2023 earnings on February 22, has refrained from providing official comments on the matter.
The move comes after the Kremlin took control of Russia's Danone subsidiary in July of the previous year, appointing Yakub Zakriev, a nephew of Chechen leader Ramzan Kadyrov, as its new head. This action was in response to sanctions imposed on Russian companies abroad following Moscow's invasion of Ukraine. Danone recorded a substantial writedown of approximately €700 million on its Russian operations, with earlier warnings suggesting a potential write-off of up to €1 billion in the event of a unit sale.
Mintimer Mingazov was subsequently added to the company's board following Zakriev's takeover, according to sources familiar with the matter and documents reviewed by the Financial Times.
In October of the same year, Danone revised its 2023 revenue growth forecast upwards after third-quarter sales exceeded analysts' expectations. The dairy giant attributed this positive performance to increased prices offsetting volume declines. At the time, Danone anticipated a like-for-like sales growth ranging between 6% and 7% for the year, surpassing the earlier projection of 4% to 6%.
Of the total amount, Danone will receive 10 billion roubles (€100.2 million) for its equity, while the remaining 7.7 billion roubles will be allocated to service debt within the Russian unit. Danone, which is scheduled to unveil its full-year 2023 earnings on February 22, has refrained from providing official comments on the matter.
The move comes after the Kremlin took control of Russia's Danone subsidiary in July of the previous year, appointing Yakub Zakriev, a nephew of Chechen leader Ramzan Kadyrov, as its new head. This action was in response to sanctions imposed on Russian companies abroad following Moscow's invasion of Ukraine. Danone recorded a substantial writedown of approximately €700 million on its Russian operations, with earlier warnings suggesting a potential write-off of up to €1 billion in the event of a unit sale.
Mintimer Mingazov was subsequently added to the company's board following Zakriev's takeover, according to sources familiar with the matter and documents reviewed by the Financial Times.
In October of the same year, Danone revised its 2023 revenue growth forecast upwards after third-quarter sales exceeded analysts' expectations. The dairy giant attributed this positive performance to increased prices offsetting volume declines. At the time, Danone anticipated a like-for-like sales growth ranging between 6% and 7% for the year, surpassing the earlier projection of 4% to 6%.
