McDonald's expected to record a US$1.2B to $1.4B write off after exiting Russia
McDonald’s Corp. agreed to sell its Russian business to existing licensee Alexander Govor, just days after saying it was exiting the country due to its invasion of Ukraine.
The fast-food chain said in a statement Thursday that Govor will acquire its entire restaurant portfolio in Russia and operate it under a new name. Terms weren’t disclosed. The agreement is subject to closing conditions, including regulatory approval, and McDonald’s expects to close the deal in the coming weeks.
The hasty removal of the golden arches in Russia is a symbolic moment since McDonald’s was one of the first Western brands to set up shop there near the end of the Cold War. The company had temporarily closed its Russian restaurants in March and then announced two months later that it would sell the business.
McDonald’s employed about 62,000 people in Russia. The company said Govor has agreed to retain employees for at least two years on equivalent terms in addition to funding existing liabilities to suppliers, landlords and utilities. Govor has been a McDonald’s licensee since 2015 and has operated 25 restaurants in Siberia.
Shares of Chicago-based McDonald’s slipped 0.7 per cent at 9:32 a.m. in New York.