Danone receives go-ahead to sell Russian subsidiary

French food group Danone said Friday that it had been given authorisation from Moscow to sell its Russian subsidiary to a close friend of the Chechen leader Ramzan Kadyrov.

Russia issued a decree last July handing "temporary" control of the shares of the Russian unit of Danone to Russia's Federal Agency for State Property Management - a move Moscow said was retaliation for sanctions placed on Russian companies abroad.

But earlier this month the Kremlin issued another decree to cancel that decision without giving any more details, but amid reports linking the group to Kadyrov.

On Friday, Danone said that "the Russian regulatory approvals required for the disposal of its EDP business in Russia to Vamin R LLC have been obtained".

It said it expected to wrap up the disposal in the coming weeks.

The subsidiary will be sold to dairy company Vamin R LLC - known as Vamin Tatarstan --which is owned by Mintimer Mingazov, who has links to Chechnya's Kadyrov.

Danone lost control of the management of its Russian subsidiary in July 2023, and said its total loss amounted to €1.2 billion euros (£1bn).

Western critics and analysts had condemned as expropriation the Kremlin's decision to seize control of the group, along with Danish brewer Carlsberg.

Russia has placed strict requirements on Western companies looking to leave the country amid its military offensive on Ukraine.

Firms must sell their Russian assets at a minimum 50 per cent discount to their market value and make a financial contribution from any sale to the Russian state budget.