Following Russia’s invasion of Ukraine, McDonald’s Corp said on Monday that it has begun the process of selling all of its outlets in the country.
The world’s largest fast food business said in March that it would close its 847 outlets in Russia, resulting in a monthly loss of $50 million. Following the transaction, it now expects to incur a non-cash charge of $1.2 billion to $1.4 billion.
The sale of its Russia assets, which include the historic Pushkin Square location in central Moscow, represents a huge retreat by a renowned Western brand.
The store was the first to open in the country in 1990, and it was once a symbol of blossoming American capitalism in the fading embers of the Soviet Union. The opening was attended by almost 5,000 people.
McDonald’s announced that it is planning to sell all of its outlets in Russia to a local buyer, but that the trademark will be kept.
“McDonald’s has concluded that ongoing ownership of the business in Russia is no longer tenable due to the humanitarian situation precipitated by the war in Ukraine, as well as the extremely uncertain operational climate,” McDonald’s said.
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As they scurry to comply with sanctions over the Ukraine crisis and deal with risks from the Kremlin that foreign-owned assets may be taken, a wave of other Western corporations has decided to sell or hand over their Russian assets to local managers.
The company stated that its 62,000 employees in Russia would be paid until the acquisition was completed and that they would have future employment with any potential buyer.
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