In a move that fuses geopolitical retaliation with economic statecraft, Vladimir Putin has signed a decree transferring the Russian operations of Nestle and three French companies to a state-controlled entity, deepening a pattern of asset seizures that began with the invasion of Ukraine in 2022. What was once a calculated corporate retreat — companies scaling back but not fully departing — has now become an involuntary surrender, as Russia closes the door on foreign capital that lingered too long. The decree touches not only balance sheets but the livelihoods of more than 40,000 workers whose
Putin seizes Nestle, French retailers' Russian assets in retaliation move
Nestle's seizure affects approximately 7,000 employees; Auchan's Russian operations employ over 33,000 workers whose employment status remains uncertain.
Russia made it harder for companies to leave, then took direct control
Mark
So Putin just took Nestle's Russian business. How much of Nestle's money are we actually talking about here?
Mimi
The analysts estimate around $1.2 billion in write-offs and stranded funds. But it's worth noting that Russia is only 1% of Nestle's global sales now—it was 2% before the war. So while it stings, it's not existential for the company.
Luke
Right, but that 1% figure—is that current revenue, or is that including the assets he just seized? Because if Nestle had already pulled back most operations, the actual ongoing business loss might be smaller than the total asset value.
Mimi
Good point. Nestle had suspended most sales and imports already. So the $1.2 billion is more about the factories, equipment, and money they can't get out of the country.
Mark
And the people working there? What happens to the 7,000 Nestle employees?
Mimi
That's the real question. Nestle said it's committed to protecting their interests and ensuring continuity, but once the business is under state control, that commitment becomes theoretical.
Luke
Has Nestle actually said what it plans to do? Or is it just assessing?
Mimi
Just assessing. They haven't announced a strategy yet. For Auchan, which has 33,000 employees in Russia, the company is still asking for clarification from authorities.
Mark
Why would Russia do this now? Hasn't the war been going on for years?
Mimi
The pattern started in 2023 with Danone and Carlsberg. Russia frames it as retaliation for sanctions and Western support for Ukraine. But it's also practical—foreign companies kept trying to leave or reduce operations, so Russia made it harder and started taking direct control.
Luke
The question is whether this actually helps Russia's economy or just prevents capital flight. Taking over a business isn't the same as making it profitable.
Mimi
True. But it does keep the assets and the workforce under state direction, which matters for Russia's domestic supply chains.
Der Puls
- Putin signed a decree this week seizing Russian operations of Nestle, Auchan, Leroy Merlin, and FM Logistic — handing them to state-controlled LEV Management as retaliation for Western sanctions over Ukraine.
- Nestle faces an estimated $1.2 billion hit in write-offs and trapped funds, and its shares dropped 2.3% on the Zurich exchange within hours of the announcement.
- Auchan's Russian subsidiary alone employs over 33,000 workers across 241 stores, while Nestle's six Russian factories support 7,000 more — leaving tens of thousands in employment limbo.
- Both Nestle and Auchan say they are assessing the situation and seeking clarification, but neither company has announced a clear path to protecting its workforce or recovering its assets.
- Russia has now seized the assets of Danone, Carlsberg, and these latest companies in a systematic pattern — signaling that any remaining Western business presence is increasingly vulnerable to state takeover.
In a move that fuses geopolitical retaliation with economic statecraft, Vladimir Putin has signed a decree transferring the Russian operations of Nestle and three French companies to a state-controlled entity, deepening a pattern of asset seizures that began with the invasion of Ukraine in 2022. What was once a calculated corporate retreat — companies scaling back but not fully departing — has now become an involuntary surrender, as Russia closes the door on foreign capital that lingered too long. The decree touches not only balance sheets but the livelihoods of more than 40,000 workers whose futures now rest in the hands of a state-aligned management firm. History offers few clean endings to such entanglements between commerce and conflict.
Vladimir Putin signed a decree this week transferring control of Nestle's Russian operations, along with those of French retailers Auchan and Lemana Pro and logistics firm FM Logistic, to a state-controlled entity called LEV Management. The move is the latest in a series of asset seizures Russia has carried out since its invasion of Ukraine in 2022.
Nestle runs six factories in Russia employing around 7,000 people, producing coffee, pet care products, infant nutrition, and confectionery. Though the company had already curtailed advertising, non-essential imports, and capital investment, it had maintained a presence to supply essential food products. That presence now comes at a steep price: analysts estimate the seizure could cost Nestle roughly $1.2 billion in write-offs and funds it has been unable to repatriate. Shares fell 2.3% in Zurich. The company said it was exploring options to protect its rights and support its workforce.
The French companies caught in the decree carry even larger human stakes. Auchan's Russian subsidiary operates 241 stores, including 62 hypermarkets, and employs more than 33,000 people. Both Auchan and Lemana Pro — formerly Leroy Merlin — are controlled by France's Mulliez family. Auchan said it was seeking clarification from Russian authorities but offered little else.
The Kremlin has framed these seizures as a response to Western sanctions and support for Ukraine. The strategy has been consistent: make it difficult for foreign companies to exit, then seize what remains. Russia followed the same playbook with Danone in 2023 — later sold to a figure linked to Chechen leader Ramzan Kadyrov — and with Carlsberg's Russian assets that same year. For the tens of thousands of workers now under state-aligned management, the immediate future remains deeply uncertain.
Vladimir Putin signed a decree this week that transferred control of Nestle's Russian operations, along with those of three French companies, to a state-controlled firm called LEV Management. The move marks the latest chapter in Russia's systematic seizure of Western assets since the invasion of Ukraine in February 2022.
Nestle operates six factories across Russia and employs approximately 7,000 people there. The company manufactures and distributes coffee, pet care products, infant nutrition, and confectionery. Yet despite this substantial footprint, Russia has become a minor part of Nestle's global business. Before the war, the country accounted for roughly 2% of the company's sales. Today that figure has shrunk to just over 1%. The company had already sharply curtailed its presence, suspending most sales, non-essential imports, advertising, and capital investment while maintaining supplies of essential food products.
The financial blow, however, remains significant. Analysts at Jefferies estimate that writing off Nestle's Russian business—including funds the company has been unable to move out of the country—could cost the Swiss food giant around 1 billion Swiss francs, or approximately $1.2 billion. News of the seizure sent Nestle's shares down 2.3% on the Zurich stock exchange. The company said it was assessing the situation and exploring options to protect its rights and maintain business continuity, particularly for its workforce.
The decree also transferred control of Auchan, a major Russian food and consumer-goods retailer, and Lemana Pro, the former Leroy Merlin DIY chain. Both are controlled by France's Mulliez family, which also owns the sports retailer Decathlon. Auchan's Russian subsidiary operates 241 stores—including 62 hypermarkets—and employs more than 33,000 people. The company said it was seeking clarification from Russian authorities about the decree but offered no immediate comment beyond that.
FM Logistic, a French logistics company, was also transferred under the same order. The Kremlin has framed these seizures as retaliation for Western sanctions and what it characterizes as hostile actions by countries supporting Ukraine. The pattern reflects a broader strategy: as Western companies either exited Russia or reduced operations after sanctions were imposed, the Russian government made it increasingly difficult for them to leave. Major foreign business deals now require presidential approval, and authorities have taken direct control of some assets outright.
This is not Russia's first such action. In 2023, Moscow seized control of Danone's Russian business, which was subsequently sold to a businessman with ties to Chechen leader Ramzan Kadyrov's family. That same year, Russian authorities took control of Carlsberg's Russian assets. The seizures of Nestle and the French retailers follow the same pattern—a tightening grip on foreign capital that remains in the country, coupled with the transfer of control to state-aligned entities. For the thousands of employees at these companies, the immediate future remains uncertain.
Bemerkenswerte Zitate
The company is assessing the situation and its options, and is committed to taking steps to protect its rights and ensure continuity of business operations, particularly for employees.— Nestle statement
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