Berkshire Hathaway’s Kraft Heinz, the US food giant, has announced that it will be selling its baby food business in Russia to local snacks and drinks manufacturer Chernogolovka, according to Reuters.
Kraft Heinz’s sale of its baby food business in Russia is estimated to be valued between 2.5 and 3 billion roubles ($32.4-$38.9 million), according to sources cited by Russia’s Kommersant newspaper on Thursday.
However, the government is yet to approve the valuation, and deals in Russia require approval from a government commission that monitors foreign investment.
This week, the commission announced that foreign investors from “unfriendly” countries selling assets in Russia would be required to donate at least 10% of the sale price to the Russian budget. It remains to be seen how this may impact the valuation and the sale itself.
This move comes as Western companies continue to exit the Russian market, allowing local firms like Chernogolovka to expand their market share and become more self-sufficient. As the Russian government tightens its regulations on foreign investment, it is becoming increasingly challenging for international companies to operate in the country.