Danone is reportedly intending to sell its operations in Russia to local dairy group Vamin Tatarstan.
The Activia maker 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.
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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.
The reports have emerged a day before the French giant, which was in the process of selling its operations in Russia, is due to release its 2023 annual results.
Danone’s Russian operations were seized by the Kremlin last July, 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.
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By GlobalDataVladimir Putin brought in new laws in April 2023 that allowed the government to seize assets from businesses that it considered “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 would result in cash impairment charges of €200m ($216m)
“On July 18, 2023, the Russian authorities indicated that the board of directors and CEO of Danone Russia (EDP) had been changed. These changes took place without the knowledge of, or approval by, Danone. While Danone no longer retains control of the management of its EDP operations in Russia, it remains their legal owner,” Danone said.
The following September, Danone Russia was re-branded to H&N (standing for health & nutrition) in September. All its products have been sold under the new brand since that period.
When asked for comment on the latest sale by Just Food, Danone said: “As you remember, in July 2023, Danone Russia (EDP), now known as H&N, was placed under the temporary external administration of the Russian Federal Agency; while Danone remained the legal owner of the assets, the company lost the management control of the business and has accordingly fully deconsolidated its EDP Russia entities from July 2023.
“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.”
Just Food has also contacted Vamin Tatarstan for comment.
