French food giant to take $973 million hit from Russia exit

France’s Danone announced on Friday it was seeking a buyer for the Russian operations of its dairy and plant-based foods unit, adding that a sale could result in a write-off of over $970 million.

“This is the best option to ensure long-term local business continuity,” the company’s statement read. It disclosed that the Russian dairy unit accounted for around 5% of the group’s net sales in the first nine months of the year.

Danone did not say to whom its Russian business would be transferred, however, a source close to the matter told Reuters the firm could retain a stake in the dairy business.

“The board has just started a process that will lead to a transaction that could be a full sale or a partial sale,” the source reportedly said, adding that the aim was to no longer operate the business.

In March, the company said it would continue to produce essential dairy and infant nutrition products in Russia but had cut other ties with the country amid the sanctions.

At the time, it said it had ended all investments in Russia and would not take any cash, dividends or profits from its business there.

The company owns the country’s top dairy brand, Prostokvashino, with 12 production sites and 8,000 employees.

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