Danone to Deconsolidate Seized Russia Business; Sees Cash Charge of Around $221 Million

   By Joshua Kirby 
 

Danone will deconsolidate its Russia business following its seizure earlier this month by authorities in the country, incurring a cash impairment of around 200 million euros ($221.1 million,) the French food-products group said Wednesday.

Russian President Vladimir Putin moved in the middle of July to take control of Danone's operations in the country, alongside those of Danish brewer Carlsberg. Chechen politician Yakub Zakriev was placed in charge of the business.

Danone said last year it was transferring operations of its business in Russia. The seizure by Putin was widely seen as an escalation of hostilities with the West amid the fullscale invasion of Ukraine launched last year.

Deconsolidation will entail a cash impairment of around EUR200 million, as well as a noncash foreign-exchange impairment of some EUR500 million, not affecting the group's equity, Danone said. Both will be booked on the last day of this year, the company said.

The Russia business will be removed from like-for-like reporting from the second half of this year, Danone said, stressing that it remains the legal owner of the business.

"Danone will continue to investigate the situation to understand the implications of the decisions of the Russian authorities on the ongoing...operations of Danone in Russia, as well as on the ongoing sale process," the company said.

Write to Joshua Kirby at [e-mail]; @joshualeokirby

(END) Dow Jones Newswires

July 26, 2023 02:27 ET (06:27 GMT)

Copyright (c) 2023 Dow Jones & Company, Inc.