PARIS — Danone SA plans to transfer control of its Essential Dairy and Plant-based (EDP) business in Russia, which over the first nine months of the year accounted for about 5% of Danone net sales and had a dilutive contribution to Danone’s like-for-like sales growth and recurring operating margin.
The transaction could result in a write-off of up to $1 billion ($972 million).
“Danone considers that this is the best option to ensure long-term local business continuity for its employees, consumers and partners,” the Paris-based company said.
The Yale School of Management at Yale University in New Haven, Conn., ranks corporations based on how they do business in Russia following the country’s invasion of Ukraine in February. As of Oct. 16, Danone was in the “buying time” category, which applies to companies that are holding off on new investments and development. Danone, before Oct. 14, had suspended all investment projects but continued with its dairy products, and the company had suspended imports of Evian and Alpro products, according to the Yale School of Management.
Corporations are ranked in five groups: withdrawal, meaning companies who halted Russian operations completely; suspension, meaning companies that temporarily have curtailed operations but kept return options open; scaling back, meaning companies reducing current operations and holding off on new investments; buying time; and digging in, meaning companies not exiting Russia or reducing activities.
Over 1,000 companies across the globe publicly have announced they voluntarily are curtailing operations in Russia to some degree beyond the bare minimum legally required by international sanctions, according to the Yale School of Management.