Danone planning to sell Russian operations to Chechnya-linked businessman- FT report

By Thomson Reuters Feb 21, 2024 | 12:50 AM

(Reuters) -French dairy products group Danone is planning to sell its Russian business to a Chechnya-linked businessman, the Financial Times reported on Wednesday, 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 ($191.88 million) to take control of Danone’s Russia business, the FT reported, citing a letter.

Danone will receive 10 billion roubles ($108.40 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 Feb. 22, declined to comment.

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 euros, after earlier warning that a deal to sell its unit could lead to a write-off of up to 1 billion euros.

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.

($1 = 92.2550 roubles)

(Reporting by Utkarsh Shetti and Shubham Kalia in Bengaluru; additional reporing by Dominique Vidalon in Paris, Editing by Varun H K and Miral Fahmy)