Danone dissolves Belarusian subsidiary amid geopolitical tensions

FRANCE – French dairy products giant Danone has initiated the dissolution of its last subsidiary in Belarus, DanoneBel, as reported by independent Belarusian analysts on April 4.

According to the company, the move marks the culmination of Danone’s gradual withdrawal from Belarus, where it has been operating since 2008.

The dissolution of DanoneBel follows the company’s earlier divestment of stakes in two Belarusian factories located in Pruzhany and Shklou.

The decision to exit Belarus comes amid increasing geopolitical tensions and international condemnation of Belarus’s support for Russia’s invasion of Ukraine.

Danone’s retreat from Belarus is part of a broader trend of Western companies scaling back or exiting operations in both Belarus and Russia in response to the ongoing conflict.

Following Russia’s full-scale invasion of Ukraine in late February 2022, numerous foreign companies have reevaluated their presence in the region.

In October 2022, Danone announced its intention to sell its Russian operations in response to escalating geopolitical tensions and regulatory challenges.

Subsequently, the Russian government assumed management control of Danone’s Russian assets in July 2023, amidst Western sanctions against Russian companies.

On March 22, 2024, Danone obtained regulatory approvals from Russia to dispose of its business in the country to Vamin R company, marking a significant step towards exiting the Russian market.

The transfer process of the business began in October 2022, with Danone citing a total loss in its accounts amounting to US$1.3 billion.

The Russian government’s decision to temporarily manage shares belonging to Danone Russia, as per a decree signed by President Vladimir Putin, underscored the heightened tensions between Western companies and the Russian state.

This move follows similar actions taken against subsidiaries of other Western companies, such as Germany’s Uniper and Finland’s Fortum.

Danone has expressed its commitment to protecting its rights as a shareholder of Danone Russia and ensuring the continuity of its operations.

The company is closely monitoring the situation and preparing to take necessary measures to safeguard the interests of all stakeholders, including its employees.

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