Fast food giant McDonald’s to exit Russia, launches sale process

McDonald’s Corporation said that it would pull out from the Russian market and has launched a process to divest its business in the country following its war on Ukraine.

The exit from Russia is expected to result in McDonald’s being hit with a charge of around $1.2-1.4 billion, which will be mainly non-cash.

The American fast food company had been operating in Russia for over three decades in Russia.

The decision from McDonald’s follows an announcement in March 2022 that it had closed its fast food restaurants in Russia temporarily and paused operations in the market. In Ukraine, McDonald’s continues to close its restaurants amid the war situation but claims to be paying full salaries to its employees.

According to the American foodservice retailer, said that the humanitarian crisis resulting from the war in Ukraine, and the increasingly unpredictable operating environment led to the conclusion that continued ownership of the business in Russia is not tenable any longer nor is it in line with its values.

Fast food giant McDonald's to exit Russia, launches sale process

Fast food giant McDonald’s to exit Russia, launches sale process. Photo courtesy of Lite/Wikimedia Commons.

McDonald’s said that it is pursuing the sale of its complete portfolio of restaurants in Russia to a local buyer. It plans to start the process of “de-Arching” the McDonald’s restaurants in Russia, which involves ending the use of the company’s name, logo, branding, and menu.

However, the fast food company will continue to hold its trademarks in Russia. The company said that its priorities include seeking to make sure that the workforce of McDonald’s Russia continues to be paid until the close of any deal and that employees have employment in the future with any potential buyer.

Chris Kempczinski — McDonald’s President and CEO said: “We have a long history of establishing deep, local roots wherever the Arches shine. 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.”

Related Posts

CATEGORIES
TAGS
Share This