Connect with us

Hi, what are you looking for?

Stock

McDonald’s is selling Russian-based business

McDonald’s Corp (NYSE: MCD) announced that it is selling its Russian-based business to Alexander Govor, the corporation’s current licensee in the region. Alexander will now control all of the McDonald’s premises in the country and will have them run under a new brand. 

Govor also agreed to keep the current workers for at least 24 months, on equivalent terms and conditions, and fund the corporate employee salaries for people who work in the country’s 45 regions until completion of the deal. 

Details of the agreement 

McDonald’s said it expects to get a $1,2 billion to $1.4 billion non-cash charge related to its total net investments in the soviet nation and foreign currency losses. The completion of the deal is expected to happen in the coming month after regulatory approval is secured. 

This is the end of an illustrious era. This first-food giant first entered Russia just a couple of months before the dissolution of the Soviet Union and has done quite exceptionally since then. 

Management thoughts 

McDonald’s Chief Executive Officer, Chris Kempczinski, said in a letter to the company’s system:

McDonald’s in Russia embodied the very notion of glasnost and took on outsized significance.

He claimed in the letter that:

Some might argue that providing access to food and continuing to employ tens of thousands of ordinary citizens, is surely the right thing to do. But it is impossible to ignore the humanitarian crisis caused by the war in Ukraine.

In the 30 years since McDonald’s opened its first location in the country, it grew its Russian-based business to approximately 850 locations. The corporation wholly-owned around 80% of those restaurants. The rest were run by franchisees. 

The company gets more revenue the more the restaurants it owns. However, it will also open itself up to more risk when the economy is struggling or in times of turmoil. 

Early this year, Russia invaded neighboring Ukraine. The company then decided to temporarily suspend operations, which then later said resulted in a $127 million loss. This helped nudge the decision to sell.

The post McDonald’s is selling Russian-based business appeared first on Invezz.

Enter Your Information Below To Receive Free Trading Ideas, Latest News, And Articles.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

You May Also Like

Investing

Maxing out your 401k retirement account is no easy feat. While people’s income and financial responsibilities differ, saving $20,500 per year boils down to...

Economy

Americans aged about 45 or older may dimly recall a song from the mid-1970s called “Convoy.” It was a campy part of the genre...

Stock

Tech companies and specifically social media giants have seen the prices of their shares drop in the past few months. Snap stock, for example,...

Investing

Most people are familiar with income taxes and sales taxes. Income taxes are automatically withheld from pay or paid by independent contractors, self-employed individuals...

Dislaimer: Investmentsspirit.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.


Copyright © 2022 Investments Spirit