Danone will study the decision of Russia to transfer part of the business to the management of the Federal Property Management Agency

Danone Holding will study Russia’s decision to transfer the company’s subsidiary to the temporary management of the Federal Property Management Agency. About it reported in the press office of the company.

“Danone has taken note of the decision of the Russian authorities to place Danone Russia under the temporary external management of the Russian authorities. Danone is currently investigating the situation,” the statement said.

The company also emphasized that Danone will take all necessary measures “to protect its rights as a shareholder of Danone Russia and ensure business continuity in the interests of all stakeholders.”

On July 16, Russian President Vladimir Putin signed a decree according to which the shares in the Russian subsidiary of Danone and the Baltika brewing company, owned by foreign companies, are transferred to the temporary administration of Russia.

According to lawyers interviewed by Vedomosti, this measure could significantly affect the ability of foreign companies to manage business in Russia and, in particular, lead to the disruption of deals with existing potential buyers.

At the beginning of March 2022, against the backdrop of the start of Russia’s special operation in Ukraine, Danone announced the suspension of investment projects in the Russian Federation. Then the company noted that the decision will not affect the production and distribution of food products.

In October 2022, the company announced plans to withdraw from business in Russia. Control of the dairy and plant products division will be transferred to a new owner. The company explained that they believe this solution is the best option to ensure long-term local business continuity for employees, consumers and partners. At the beginning of February 2023, Kommersant informedthat Danone is ready to transfer control over a part of Russian assets to potential investors, subject to the inclusion of a buyback option in the transaction.