Danone to withdraw from Russia with €1-B write-off

French food group Danone logo is seen at the company headquarters in Rueil-Malmaison near Paris, France, February 20, 2022. REUTERS/Gonzalo Fuentes/File photo

PARIS  – French food company Danone said on Friday it would shed its dairy food business in Russia in a deal that could lead to a write-off of up to 1 billion euro ($978 million), the latest costly exit from the country by a global company.

“This is the best option to ensure long-term local business continuity”, Danone said in a statement, adding the Russian unit accounted for roughly 5 percent of the group’s net sales in the first nine months of the year.

Shortly after Russia’s invasion of Ukraine in February, Danone had said that all options regarding its local business were on the table.

Danone did not disclose to whom it would transfer the so-called Essential Dairy and Plant-based (EDP) unit. It said the transaction was subject to regulatory approvals and if completed would result in the deconsolidation of the EDP business from its accounts.

Danone’s planned exit from Russia is the second such announcement this week from a major Western company, coming after Nissan sold its assets for a symbolic rouble to the state, taking a loss of around $687 million.

($1 = 1.0224 euros)