International Finance

McDonald’s finds buyer for its Russia business

IFM_McDonalds exiting Russia-image

US-origin quick-service restaurant chain McDonald’s has finally reached an agreement with Russian businessman Alexander Govor to sell its business in Russia. Govor already operates 25 restaurants in Siberia.

Other than his interests in restaurants, he also is the co-owner of Neftekhimservis, a construction investor, and a board member of another real estate firm that operates luxury hotels and private medical clinics. Earlier, some of the shops had removed their trademark M logos.

According to the new agreement, Govor will run the McDonald’s empire in Russia under a new name post the deal. The deal also includes an agreement that 62,000 employees working in the stores will be retained for the next two years and similar agreements will be preserved with suppliers, landlords, and utility providers for the same period. Until the sale deal goes through, Govor has also agreed to pay the corporate employees of McDonald’s, The Guardian reported. The acquisition deal is likely to be closed within a few weeks, according to McDonald’s.

This development comes after more than two months that Russian outlets of McDonald’s were in limbo after the company was preparing to stop operations. Companies like McDonald’s are leaving Russia as a mark of the Western ostracization of the Vladimir Putin regime over its war against Ukraine. The Guardian reported that the cost of the closure was $55 million a month for the company as it had to bear the cost of paying wages for the workers and other operational fixed expenses.

Until this war, Russia amounted to 9% of McDonald’s annual sales globally to the tune of $2 billion.

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