McDonald's announced Monday it would sell its Russian business after more than 30 years of operations in the country as the war continues in Ukraine.
The announcement comes after McDonald's said in early March that it temporarily closed restaurants in Russia and paused operations in the market.
"The humanitarian crisis caused by the war in Ukraine, and the precipitating unpredictable operating environment, have led McDonald's to conclude that continued ownership of the business in Russia is no longer tenable, nor is it consistent with McDonald's values," McDonald's said in a statement.
The company said it is pursuing the sale of its entire portfolio of McDonald's restaurants in Russia to a "local buyer" and intends to initiate the process of "de-Arching" those restaurants, which entails no longer using the McDonald's name, logo, branding, and menu, though McDonald’s will continue to retain its trademarks in Russia.
McDonald's said its priorities include seeking "to ensure the employees of McDonald's Russia continue to be paid until the close of any transaction and that employees have future employment with any potential buyer."
"We're exceptionally proud of the 62,000 employees who work in our restaurants, along with the hundreds of Russian suppliers who support our business, and our local franchisees," McDonald's President and CEO Chris Kempczinski said in a statement. "Their dedication and loyalty to McDonald's make today's announcement extremely difficult. "However, we have a commitment to our global community and must remain steadfast in our values. And our commitment to our values means that we can no longer keep the Arches shining there."
Meanwhile, McDonald's restaurants in Ukraine remain closed while the company continues to pay full salaries for its employees in the country and "continues to support local relief efforts led by Ronald McDonald House Charities," a press release said. "Across Europe, the McDonald's System is supporting Ukrainian refugees through food donations, housing and employment."
As a result of its exit from Russia, the company said it expects to record a charge, which is primarily non-cash, of approximately $1.2-$1.4 billion to write off its net investment in the market and recognize significant foreign currency translation losses previously recorded in shareholders' equity.