McDonald’s, an American fast-food giant, announced Monday it will sell its Russian business and exit the market entirely.
It said upon its exit it would sell its business in the country to a local buyer.
This development came months after the company announced a temporary closing of its restaurants in the country.
In March, the fast-food chain announced it had temporarily closed restaurants in Russia and paused operations in the market in response to the country’s invasion of Ukraine.
In a statement on Monday, the fast-food chain, which has operated for over 30 years in the country and employed 62,000 people, said “The humanitarian crisis caused by the war in Ukraine, and the precipitating unpredictable environment, have led McDonald’s to conclude that continued ownership of the business in Russia is no longer tenable, nor is it consistent with McDonald’s values.”
“As part of McDonald’s decision to exit, the Company is pursuing the sale of its entire portfolio of McDonald’s restaurants in Russia to a local buyer,” it said.
The company said it intends to initiate the process of “de-Arching” those restaurants, which entails no longer using the McDonald’s name, logo, branding, and menu, though the company will continue to retain its trademarks in Russia.
“McDonald’s priorities include seeking to ensure the employees of McDonald’s Russia continue to be paid until the close of any transaction and that employees have future employment with any potential buyer,” the statement said.
Chris Kempczinski, McDonald’s president and chief executive officer, said in the statement, “We have a long history of establishing deep, local roots wherever the Arches shine. We’re exceptionally proud of the 62,000 employees who work in our restaurants, along with the hundreds of Russian suppliers who support our business, and our local franchisees.
“Their dedication and loyalty to McDonald’s make today’s announcement extremely difficult. However, we have a commitment to our global community and must remain steadfast in our values. And our commitment to our values means that we can no longer keep the Arches shining there,” Mr Kempczinki said.
McDonald’s said its restaurants in Ukraine remain closed while the company continues to pay full salaries for its employees in the country and continues to support local relief efforts led by Ronald McDonald House Charities.
As a result of its exit from Russia, the company said it expects to record a charge, which is primarily non-cash, of approximately $1.2-1.4 billion to write off its net investment in the market and recognize significant foreign currency translation losses previously recorded in shareholders’ equity.
Since the Russian invasion of Ukraine in February, many western businesses have exited the Russian market.
RENAULT TOO
Similarly, French automaker, Renault, has announced it is selling its entire Russian operation including its stake in Lada-maker Avtovaz in the country.
The company had in March announced it was suspending operations at its Moscow factory.
In a statement on Monday, the French company said its board of directors had approved the signing of agreements to sell 100 per cent of Renault Group’s shares in Renault Russia to Moscow City entity and its 67.69 per cent interest in AVTOVAZ to NAMI (the Central Research and Development Automobile and Engine Institute).
“The agreement provides for an option for Renault Group to buy back its interest in AVTOVAZ, exercisable at certain times during the next 6 years,” the company said.
“Today, we have taken a difficult but necessary decision; and we are making a responsible choice towards our 45,000 employees in Russia, while preserving the Group’s performance and our ability to return to the country in the future, in a different context. I am confident in the Renault Group’s ability to further accelerate its transformation and exceed its mid-term targets,” Luca de Meo, CEO Renault group said in the statement.
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McDonald’s, an American fast-food giant, announced Monday it will sell its Russian business and exit the market entirely.
It said upon its exit it would sell its business in the country to a local buyer.
This development came months after the company announced a temporary closing of its restaurants in the country.
In March, the fast-food chain announced it had temporarily closed restaurants in Russia and paused operations in the market in response to the country’s invasion of Ukraine.
In a statement on Monday, the fast-food chain, which has operated for over 30 years in the country and employed 62,000 people, said “The humanitarian crisis caused by the war in Ukraine, and the precipitating unpredictable environment, have led McDonald’s to conclude that continued ownership of the business in Russia is no longer tenable, nor is it consistent with McDonald’s values.”
“As part of McDonald’s decision to exit, the Company is pursuing the sale of its entire portfolio of McDonald’s restaurants in Russia to a local buyer,” it said.
The company said it intends to initiate the process of “de-Arching” those restaurants, which entails no longer using the McDonald’s name, logo, branding, and menu, though the company will continue to retain its trademarks in Russia.
“McDonald’s priorities include seeking to ensure the employees of McDonald’s Russia continue to be paid until the close of any transaction and that employees have future employment with any potential buyer,” the statement said.
Chris Kempczinski, McDonald’s president and chief executive officer, said in the statement, “We have a long history of establishing deep, local roots wherever the Arches shine. We’re exceptionally proud of the 62,000 employees who work in our restaurants, along with the hundreds of Russian suppliers who support our business, and our local franchisees.
“Their dedication and loyalty to McDonald’s make today’s announcement extremely difficult. However, we have a commitment to our global community and must remain steadfast in our values. And our commitment to our values means that we can no longer keep the Arches shining there,” Mr Kempczinki said.
McDonald’s said its restaurants in Ukraine remain closed while the company continues to pay full salaries for its employees in the country and continues to support local relief efforts led by Ronald McDonald House Charities.
As a result of its exit from Russia, the company said it expects to record a charge, which is primarily non-cash, of approximately $1.2-1.4 billion to write off its net investment in the market and recognize significant foreign currency translation losses previously recorded in shareholders’ equity.
Since the Russian invasion of Ukraine in February, many western businesses have exited the Russian market.
RENAULT TOO
Similarly, French automaker, Renault, has announced it is selling its entire Russian operation including its stake in Lada-maker Avtovaz in the country.
The company had in March announced it was suspending operations at its Moscow factory.
In a statement on Monday, the French company said its board of directors had approved the signing of agreements to sell 100 per cent of Renault Group’s shares in Renault Russia to Moscow City entity and its 67.69 per cent interest in AVTOVAZ to NAMI (the Central Research and Development Automobile and Engine Institute).
“The agreement provides for an option for Renault Group to buy back its interest in AVTOVAZ, exercisable at certain times during the next 6 years,” the company said.
“Today, we have taken a difficult but necessary decision; and we are making a responsible choice towards our 45,000 employees in Russia, while preserving the Group’s performance and our ability to return to the country in the future, in a different context. I am confident in the Renault Group’s ability to further accelerate its transformation and exceed its mid-term targets,” Luca de Meo, CEO Renault group said in the statement.
Support PREMIUM TIMES’ journalism of integrity and credibility
Good journalism costs a lot of money. Yet only good journalism can ensure the possibility of a good society, an accountable democracy, and a transparent government.
For continued free access to the best investigative journalism in the country we ask you to consider making a modest support to this noble endeavour.
By contributing to PREMIUM TIMES, you are helping to sustain a journalism of relevance and ensuring it remains free and available to all.
Donate
TEXT AD: To place an advert here . Call Willie – +2348098788999