McDonald's said it has struck a deal to sell its Russian business to Alexander Govor.
Govor will acquire all of McDonald's locations in Russia and operate them under a new brand. He agreed to retain employees for at least two years, on the same terms, and fund the salaries of corporate employees who work in 45 regions of the country until the deal closes and existing liabilities to suppliers, landlords and utilities are paid off.
The deal's financial terms were not disclosed.
McDonald's said on Monday that it expects to record a noncash charge of up to $1.4 billion related to its net investment in Russia and foreign currency losses.
The sale is expected to close in the coming weeks. It is the end of an era for the fast-food giant, which first entered the country just months before the Soviet Union dissolved.
Chris Kempczinski wrote a letter to the McDonald's system on Monday after the company announced its plans to open a store in Russia.
McDonald's has grown its Russian business to roughly 850 locations in the three decades since it opened its first location in Moscow. The company owned most of the restaurants. It is possible for the company to make more money by owning more of its restaurants, but it is also possible for the company to be at greater risk during times of turmoil or economic downturn.
McDonald's temporarily closed its Russian locations after the Kremlin invaded Ukraine. The company said in late April that the war cost it $127 million in the first quarter. The business was going to be sold on Monday.
Providing access to food and continuing to employ tens of thousands of ordinary citizens is surely the right thing to do. Kempczinski said in his letter that it is impossible to ignore the humanitarian crisis caused by the war in Ukraine.
Exxon Mobil is one of the companies that are selling their Russian businesses.
Govor has been a licensee of the fast-food chain since 2015.
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