French dairy products group Danone is planning to sell its Russian business to a Chechnya-linked businessman, the Financial Times reported, months after Moscow took temporary control of the company's business in Russia.
Dairy company Vamin Tatarstan, owned by the businessman Mintimer Mingazov, has agreed to pay 17.7 billion roubles (€180 million) to take control of Danone’s Russia business, the FT reported, citing a letter.
Danone will receive 10 billion roubles (€100.2 million) for its equity while 7.7 billion roubles will go towards servicing debt in the Russian unit, the report added.
Danone, which reports its full year 2023 earnings on February 22, declined to comment.
Russia's Danone Subsidiary
In July last year, Yakub Zakriev, a nephew of Chechen leader Ramzan Kadyrov, was appointed the new head of Russia's Danone subsidiary after the Kremlin took control of the business in retaliation against sanctions on Russian companies abroad after Moscow invaded Ukraine.
Danone then took the overall writedown on its Russian operations to around €700 million, after earlier warning that a deal to sell its unit could lead to a write-off of up to €1 billion.
Mingazov was installed to the company's board after Zakriev took control, the report said, citing documents seen by the newspaper and people familiar with the situation.
Last October, Danone adjusted its 2023 revenue growth forecast upwards following third-quarter sales that surpassed analysts' expectations, as an increase in prices contributed to offsetting the decline in volumes.
The dairy giant said at the time that it anticipated like-for-like sales growth to range between 6% and 7% for the year, compared to the earlier projection of 4% to 6%.
Additional reporting by ESM
