• Alexander Govor is McD’s Siberian licensee, who operates 25 restaurants
• Although McD would retain its trademarks, Govor will operate the restaurants under new brand
McDonald’s Corp (NYSE: MCD) on Thursday said it has struck a deal to sell its Russian operation to Alexander Govor, its current licensee in the market, making it the biggest exit by a global brand.
The world’s largest burger chain on Monday said it would exit the Russian market and intended to sell its business after operating for more than three decades and has initiated a process to sell its restaurants in the country.
Govor will acquire all of McDonald’s locations in Russia and will operate them under a new brand. However, the fast-food giant said it would retain its trademarks.
The Chicago-based company owns 84% of its nearly 850 restaurants in Russia.
McDonald’s, in March, announced to temporarily halt all operations in Russia following an unprovoked invasion of Ukraine.
Govor runs the burger chain’s franchise operation through GiD LLC and has been a McDonald’s licensee since 2015. He helped the company expand into remote Siberia, where he operates 25 restaurants.
He agreed to retain McDonald’s employees for at least two years on equivalent terms and fund the salaries of corporate employees who work in 45 regions of Russia until the deal closes. He will also fund existing liabilities to suppliers, landlords, and utilities.
The financial terms of the deal were not disclosed.
McDonald’s earlier said it expects to record a non-cash charge of $1.2 billion to $1.4 billion following the sale.
The sale is expected close in the coming weeks if it secures regulatory approval.
Picrure Credit: CNBC
ALSO READ: