McDonalds sells its Russian operations to Alexander Govor | Photo credits: © McDonald’s Corporation
May 19 (Reuters) – McDonald’s Corp on Thursday announced a sale agreement with Russian businessman Alexander Govor, which already operates franchise restaurants in Siberia and will continue the U.S. group’s business under a different name.
This decision follows the announced departure of the fast food chain from Russia, due to the invasion of Ukraine.
Alexander Govor, who runs GiD LLC, has held a McDonald’s license since 2015 and had helped the chain expand into Siberia, where he runs 25 restaurants.
McDonald’s and GiD declined to disclose financial terms of the deal, which is expected to be finalized in the coming weeks.
The agreement provides that employees keep their jobs for at least two years under equivalent conditions. Alexander Govor has agreed to pay the company’s salaries in 45 regions of the country until the agreement is finalized.
According to Minister of Industry and Trade Denis Manturov, the agreement is the result of a “long and difficult” negotiation process and the government will provide Alexander Govor with all the necessary assistance to settle.
McDonald’s has been in Russia for more than 30 years and owns around 84% of its approximately 850 restaurants in the country. It is one of the largest global companies to leave the country since the start of the Ukrainian conflict.
Last year, the company generated about 9% of its revenue, or $2 billion, from Russia and Ukraine.
Several other Western brands, including Imperial Brands and Shell, have also sold their Russian assets or handed them over to local managers.
(Reporting by Praveen Paramasivam in Bangalore; French version Dina Kartit, editing by Sophie Louet)