The retreat from Russia turned into a debacle for French companies, which prided themselves, before the invasion of Ukraine on February 24, 2022, on being the country’s leading foreign employers. One name sums up this trauma: that of Danone. At the end of July 2023, just four days after the signing of a presidential decree ratifying the takeover of the twelve factories of the agri-food group, local leaders saw Yakoub Zakriev, the new de facto buyer and former minister of agriculture, arrive in their offices Chechen, nephew of the leader of Chechnya, Ramzan Kadyrov.
According to Financial Times, Danone would have started discussions to sell the assets to Murtimer Mingazov, a close friend of this nephew of Mr. Kadyrov. This provisional “putting under supervision” managed by Rosimushchestvo, the federal agency for state holdings, was seen by Western business leaders as a pure and simple expropriation maneuver, the result of both a departure poorly negotiated by the French group, political considerations difficult to decipher and the voracious appetites of local actors who know how to sense vulnerabilities.
Clearly, the episode showed that there is no guarantee of a successful start, even when playing by the rules. Danone has written down its Russian activities by 500 million euros from 2022 and an additional 200 million euros in 2023.
Painful experience
The experience of Renault, which escaped expropriation, is just as painful. The French group bought back at the end of the 20the century, in Moscow, the Moskvitch factory, then abandoned, before redeveloping it and equipping it to assemble more than 100,000 models per year from 2010. In 2008, he made a second acquisition, for 1 billion euros, part of the capital of AvtoVAZ, the manufacturer of the Lada, owner of a huge factory in the heart of the “automobile valley” in the Samara region, in the south-west of the Russia.
Renault pays off debts, finds new suppliers, layoffs, rehires, trains. It employed 45,000 people on site at the time of the Russian invasion of Ukraine. On May 16, 2022, the group made the decision to sell, without daring to reveal the amount, its first factory in the city of Moscow and its participation in the second to the Central Institute for Research and Development of Automobiles and Engines, a public body.
It is giving up on its second largest market, in volume, after France, with a loss of 2.3 billion euros on its 2023 result. Ultimate snub: the Russian Minister of Industry and Trade, Denis Manturov, later revealed that the two Renault entities were sold for… 1 ruble (1 euro cent) each.
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