French retail giant Auchan negotiates final terms for Russia departure

French retail giant Auchan is preparing to exit the Russian market after finding local buyers for its operations, La Lettre and Le Figaro reported on 24 October 2024, RFE/RL reports. According to Le Figaro, the company has shortlisted two potential local buyers and entered final negotiations for the sale.

While most Western companies stopped doing business in Russia and withdrew within the first two years of its ongoing full-scale invasion of Ukraine, Auchan remains operational 2.5 years into the war.

The decision reportedly comes amid deteriorating business conditions, particularly due to sanctions imposed on Russia following its invasion of Ukraine.

“Auchan strictly complies with sanctions imposed against Russia. It neither invests nor returns a single kopeck,” a source told Le Figaro.

The source added that alleged sanctions compliance puts Auchan at a disadvantage compared to local businesses, who can only invest their money locally due to restrictions.

The deal requires approval from Russian authorities. La Lettre noted that assets of other foreign companies, such as Danone and Carlsberg, were effectively nationalized in Russia.

Auchan’s Russian division told RBC it would not comment on “market rumors,” noting that discussions about the chain’s potential exit have circulated for several years, as per RFE/RL.

• After Russia’s invasion of Ukraine, Auchan initially remained in Russia, citing job preservation and the need to ensure food supply. In early 2023, Le Monde, The Insider, and Bellingcat investigators reported that Auchan was supplying the Russian army, which the chain denied.
• Recently, Russian authorities tightened restrictions on foreign business exits, increasing the mandatory discount on market value from 50% to 60% and raising the budget contribution from 15% to 35% for foreign companies selling Russian assets, RFE/RL says.

Earlier this month, Unilever, the global consumer goods giant, announced the completion of its Russian subsidiary sale to Arnest Group, a local manufacturer of perfume, cosmetics, and household products.

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