FRANCE – French multinational food-products corporation Danone, is set to sell its Russian assets, now operating as H&N, in a deal amounting to US$192.9 million, according to reports from the Financial Times (FT).
The move to sell it to Vamin Tatarstan, a Russian dairy company, comes seven months after Russian President Vladimir Putin ordered the seizure of Danone’s local operations in the country.
A letter from Ayrat Mukhamadeev, the director of a newly created company owned by Vamin Tatarstan, addressed to Russia’s Minister of Agriculture Dmitry Patrushev and seen by FT, states that they have agreed to pay US$192.75M to take control of Danone’s Russia business.
The breakdown of the deal includes US$81.8 million designated for paying off debt in Danone’s Russia operation, with the remaining funds allocated to cover Danone’s equity in the company.
However, the deal’s completion is contingent on approval from Russia’s Ministry of Agriculture and a subsequent vote by a special government subcommittee responsible for approving exits by Western companies.
Danone, which initially expressed intent to remain in Russia even after the full-scale invasion of Ukraine, changed its stance in October 2022.
The company announced plans to seek a buyer, acknowledging a potential write-down of up to US$1.08 billion.
According to Financial Times report, Danone has incurred a loss exceeding US$759.7million on its Russia operations since the seizure, coupled with an additional depreciation of €500 million in July due to the devaluation of the Russian rouble.
In addition, FT revealed that the proposed deal reflected a 56% discount to market value, with Moscow typically demanding at least a 50% discount for foreign asset sales.
Meanwhile, Danone has committed to providing support until the end of July 2025 to localize production of specific ingredients, preserving the quality of products for Russian consumers.
This announcement follows a decree by Putin in July last year, subjecting Danone’s and Carlsberg’s Russian businesses to “temporary external management.”
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