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RUSSIA: McDonald’s set to exit, sells business

MCDONALD’S announced Monday that it will leave the Russian market and sell its business in the increasingly isolated country.

Since Russia’s invasion of Ukraine in February, several Western companies have left the country.

Renault, a French automaker, declared earlier on Monday that it had handed over its Russian assets to the Russian government in Moscow, marking the first big nationalisation of the economic disentanglement.

McDonald’s closed all of its 850 restaurants across the country in March, trying to claim to employ 62,000 workers.

But on Monday it went a step further, saying in a statement: “After more than 30 years of operations in the country, McDonald’s Corporation announced it will exit the Russian market and has initiated a process to sell its Russian business.

“The humanitarian crisis caused by the war in Ukraine, and the precipitating unpredictable operating 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.”

It said it was looking to sell “its entire portfolio of McDonald’s restaurants in Russia to a local buyer”.

The restaurants would no longer be permitted to use the McDonald’s name, logo, branding, or menu after the transaction, according to the corporation.

Russia accounts for 9% of the company’s revenue and 3% of its operational profit, with McDonald’s directly managing more than 80% of the company’s bearing its brand.

Chief executive Chris Kempczinski said in a statement: “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.”

On February 24, Russian President Vladimir Putin sent soldiers into pro-Western Ukraine, prompting unprecedented Western sanctions and a mass departure of multinational firms such as H&M, Starbucks, and Ikea.

The authorities stated that they were willing to nationalize foreign assets, as they had done with Renault, and some officials told Russians that their favorite brands would have domestic alternatives.

Moscow officials have attempted to downplay the severity of Western sanctions, stressing that Russia will adapt and take precautions to prevent the flight of foreign currency and capital.

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