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Danone towards the sale of its activities in Russia

Agreement closed with Vamin Tatarstan to whom dairy yields: loss of € 1.2 billion

Danone is on the way to agreement regarding its activities in Russia. After the latest news of recent days that foreshadowed a resurgence of hostilities with the Putin government since 2022, today the company seems to have taken a step towards the sale of its dairy businesses in the country. With a brief official statement the company announces that "the necessary Russian regulatory approvals have been obtained for the sale of the Edo assets in Russia to Vamin R LLC. The closure of this sale is expected in the coming weeks". Edo activities include the dairy and plant division in Russian territory. 

"We remember -adds the note- that Danone has started the process of cession of this activity in October 2022. In July 2023, Danone deconsolidated EDP Russia from its accounts after losing control of the management. The total loss acknowledged by Danone in his accounts amounts to 1.2 billion Euro".

In fact, therefore, Danone plans to close "in the coming weeks" the transaction with the Russian dairy producer Vamin Tatarstan, owned by local entrepreneur Mintimer Mingazov. The dairy division represents 90% of Danone’s activities in Russia: the remaining part concerns infant formula through its specialized nutrition unit. The closing of the transaction would mark the end of a long saga about Dano’s presence in Russia, which broke out after Vladimir Putin’s invasion of Ukraine in february 2022.

In february the company announced a 7% increase in turnover in 2023 to 27.62 billion Euros on equal terms compared to the previous year, but the net profit decreased by 8.1% to 881 million Euros. The company has recorded a recurring profit for action of 3,54 Euros, "compensated from an effect of perimeter negative of the -4,5%, deriving mainly from the deconsolidation of our activity Edo in Russia -explains to the analysts the financial director Juergen Esser-. With the deconsolidation in july, we devalued all the assets we had on the balance sheet, about 700 million Euros". 

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EFA News - European Food Agency