Putin seizes Nestle, French firms’ Russia assets over West's Ukraine support: How big is Nestle’s business there?

A decree signed by Russian President Vladimir Putin transferred the Russian operations of Nestle, French retailer Auchan, former Leroy Merlin DIY chain — now known as Lemana Pro — and French logistics company FM Logistic to a firm called LEV Management.

Russian authorities have seized the businesses and assets of Swiss food giant Nestle and three French groups, in the latest move against Western companies. The Kremlin has framed such measures as retaliation against Western sanctions and what it considers hostile actions by countries supporting Ukraine.

A decree signed by Russian President Vladimir Putin transferred the Russian operations of Nestle, French retailer Auchan, former Leroy Merlin DIY chain — now known as Lemana Pro — and French logistics company FM Logistic to a firm called LEV Management.

How big is Nestle's business in Russia?

Nestle has six factories in Russia and employs around 7,000 people, according to a company spokesperson, as per AFP report. Its Russian operations primarily manufacture and distribute products across categories including coffee, pet care, infant nutrition and confectionery.

However, Russia represents a relatively small share of Nestle's global business. As per the news report, Swiss investment bank Vontobel analyst Jean-Philippe Bertschy said Russia now accounts for just over 1% of Nestle's group sales, compared with around 2% before the Ukraine war.

Nestle has significantly reduced its presence in the country since Russia invaded Ukraine. The company has suspended most sales, non-essential imports, advertising and capital investment, while continuing to supply essential food products.

Nestle said it was assessing the latest development and its options.

“The company is assessing the situation and its options,” Nestle said, adding that it was committed to taking steps to protect its rights and ensure continuity of business operations, particularly for employees.

Nestle could face $1.2 billion hit

Although Russia contributes only a small proportion of Nestle's overall sales, analysts cited by AFP said the seizure could still result in a substantial financial loss.

Brokerage Jefferies estimated that writing off Nestle's Russian business, including funds that the company has been unable to repatriate, could cost the Swiss group around 1 billion Swiss francs ($1.2 billion).

Nestle shares fell about 2.3% on the Zurich stock exchange following news of the seizure.

What happened to Auchan and Leroy Merlin?

The Russian operations of Auchan and Lemana Pro, formerly Leroy Merlin, were also transferred under Putin's decree. Both businesses are controlled by France's Mulliez family, which also owns sports retailer Decathlon.

Auchan is one of Russia's major food and consumer-goods retailers. Its Russian subsidiary has 241 stores, including 62 hypermarkets, and more than 33,000 employees, according to its website.

Auchan Retail Russia said it had sought clarification from Russian authorities regarding the presidential decree.

“Once the corresponding information has been received, we will be able to provide more detailed comments,” the company said.

Why is Russia seizing Western companies?

The latest asset transfers are part of a broader pattern that emerged after Russia's invasion of Ukraine in February 2022.

Many Western companies either sold their Russian operations or sharply reduced their activities after sanctions were imposed. Others remained in the country, citing their responsibilities toward employees or the need to continue supplying essential products.

Russia subsequently introduced restrictions that made it harder for foreign companies to exit. Deals involving major foreign businesses generally require presidential approval, while authorities have also taken direct control of some assets.

Previous seizures of Western assets

Russia has previously taken control of the Russian operations of several major Western companies.

In 2023, Moscow seized control of Danone's Russian business, which was subsequently sold to a businessman linked to the family of Chechen leader Ramzan Kadyrov. Russian authorities also took control of Carlsberg's Russian assets that year.

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