Putin revokes ”nationalisation” of Danone’s Russian assets

Russian President Vladimir Putin. Photo: Getty Images

Russian President Vladimir Putin has revoked the transfer of Danone’s Russian assets to the Federal Agency for State Property Management, Rosimushchestvo, for temporary management by the state. His reasons for doing this were not disclosed in the decree.

Source: Forbes Russia

Details: In July 2023, Putin transferred foreign citizens’ shares in the Baltika Brewery and Danone’s Russian subsidiary to Rosimushchestvo for temporary state management. The companies had previously announced that they were selling their Russian assets.

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Ibragim (Yakub) Zakriev, deputy head and agriculture minister of the Chechen government and a nephew of Chechen leader Ramzan Kadyrov, was subsequently appointed as the new CEO of Danone Russia.

Russian Finance Minister Anton Siluanov explained in November 2023 that temporary state management would be introduced at companies from “unfriendly” countries in exceptional circumstances, claiming that companies were failing to fulfil obligations, mainly social ones, and committing violations of Russian law.

Danone reported at the end of July 2023 that it had written its Russian business off from its balance sheet. It booked impairment losses of around €200 million, with a further adjustment of about €500 million due to the depreciation of the rouble against the euro.

Background:

• The Financial Times reported in February that Danone was planning to sell its Russian business, seized in 2023 on Putin’s orders, to a businessman close to the Kremlin with links to the Chechen government.
• The French dairy producer was said to be intending to sell its Russian operations – rebranded Life & Nutrition – to Vamin Tatarstan, a Russian dairy company owned by 29-year-old Mintimer Mingazov.
• Mingazov was appointed to the board of directors of Life & Nutrition last summer, shortly after the Kremlin handed over control of the business to Yakub Zakriev, a 33-year-old nephew of Chechen leader Ramzan Kadyrov, in response to Western sanctions.

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