Danone is planning to sell its Russian business to a Chechnya-linked businessman, the Financial Times reported today.
The French dairy group first announced it were looking for a buyer of its Russian operations in October 2022.
The company’s Russian business was temporarily taken over by the Kremlin in July 2023. The government took over Carlsberg’s Russian operations at the same time.
The planned sale is to dairy company Vamin Tatastan, owned by businessman Mintimer Mingazov.
Vamin Tatastan has agreed to pay 17.7 billion roubles (€191.88 million) for control of the Russian business.
Danone will receive 10 billion roubles (€108.4 million) for its equity. The remaining 7.7 billion roubles will go towards servicing debt in the Russian unit.
Danone, which reports its full year earnings for 2023 on 22 February, declined to comment on the deal.
Russian Control
In July last year Yakub Zakriev, nephew of Chechen leader Ramzan Kadyrov, was appointed the new head of Russia’s Danone subsidiary.
Mingazov was installed to the company’s board after Zakriev took control, the report said.
The Kremlin had taken control of the business in retaliation against sanctions on Russian companies abroad following the Russian invasion of Ukraine.
Danone took the overall write-down on its Russian operations to around €700 million. It had warned earlier that a deal to sell its unit could lead to a write-off of up to €1 billion.
It cited documents seen by the newspaper and people familiar with the situation.
The deal is subject to approval by Russia’s Ministry of Agriculture, and will then be voted on by a special government subcommittee.
The news comes after Oreo-makers Mondelez appointed new management for its Russian business this week.
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