Danone has announced it is in the process of offloading its Essential Dairy and Plant-based (EDP) business in Russia, which represents approximately 90% of its operations in that country. The decision could result to a write-off of up to $978 million.
Danone did not disclose to whom the business would be transferred, and the company could still retain a stake in the dairy business. Danone also will retain its infant nutrition unit.
In a press release, Danone stated that considers that its decision to initiate a process to transfer the effective control of its Essential Dairy and Plant-based (EDP) business in Russia would be the best option to ensure long-term local business continuity, for its employees, consumers, and partners. Once closed, the transaction, which will be subject to regulatory approvals, would result in the deconsolidation of Danone’s EDP Russia business.
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Weeks after the Russian invasion of Ukraine, Danone announced that, while it would continue to produce essential dairy and infant nutrition products in Russia, it would be cutting all other ties with the country. At the same time, Danone stated that it would not be making any future investments in Russia and would not be taking any cash, dividends, or profits from its business in the country.
Danone is the latest global food giant to cut ties with Russia. In recent months, PepsiCo and Coca-Cola ceased the manufacture of their popular soda brands in the country, Nestlé has suspended the sale of certain brands, and McDonald’s and Starbucks have shut all their locations in Russia.