Stay – and Lose Control: Auchan, Nestlé and Leroy Merlin in Russia

Was the decision to stay in Russia in order not to lose assets really more financially advantageous than exiting? Let us look at the cases of Auchan, Nestlé and Leroy Merlin’s former Russian business. Four and a half years after the start of the full-scale war, the outcome is quite revealing.JOIN US ON TELEGRAMFollow our coverage of the war on the @Kyivpost_official. On Sept. 17, 2026, Russian assets of Auchan and Nestlé, as well as LLC Le Monlid – the former Leroy Merlin – were transferred to the temporary management of the Russian company L.E.V. Management. The same decree also covered the assets of FM Logistic and Bati Logistics. An important nuance is that, technically, this ostensibly does not constitute nationalization. Under Decree No. 302, the temporary manager receives the powers of the owner, except for the right to dispose of the property, while such temporary management can only be terminated by the President of Russia. In other words, ownership may formally remain with the foreign company, but it loses operational control over the business. This is why such a mechanism may be regarded as a form of indirect expropriation: legal title to the asset formally remains with the owner, while the owner is effectively deprived of the economic value of the asset and the ability to manage it. Auchan and Nestlé are far from the first foreign companies whose Russian assets have been placed under temporary management. Since 2023, this mechanism has already been applied to the Russian entities of Fortum, Uniper, Danone and Carlsberg, and later to Ariston, BSH, AgroTerra, the assets of Universal Beverage, which operated under the Glavprodukt brand, and the joint Russian business of Anheuser-Busch InBev and Anadolu Efes. Other Topics of Interest Ukraine Repels 197 Russian Attacks on Monday The General Staff of the AFU reports 197 combat engagements over the 24-hour period ending 10:00 p.m. Monday, with Russia concentrating assaults largely on the Pokrovsk and Kostiantynivka axes. But not all of these cases ended in nationalization: Danone and Carlsberg later sold their businesses, while Ariston regained control over its Russian subsidiary. Confirmed cases in which foreign assets effectively passed into Russian state ownership include the entities of Universal Beverage, which owned canned-food producer Glavprodukt, and Raven Property Group, which included the Raven Russia warehouse network. Therefore, placing Auchan and Nestlé under temporary management does not yet mean the final loss of ownership rights, but previous cases show that this mechanism can become the first step toward a full seizure of assets. This is where it becomes especially interesting to look at what these companies were doing throughout the previous years. Auchan: ‘Leaving was possible economically, but not from a human point of view’ In March 2022, Auchan CEO Yves Claude explained the decision to stay by saying that the company had to preserve jobs and continue supplying the population with food. At the time, he said that leaving was possible “from an economic point of view” but not “from a human point of view.” Around 30,000 Auchan employees were working in Russia, while the Russian market accounted for approximately 10% of the group’s global sales. And this was not simply a wait-and-see approach. In April 2024, Auchan Retail Russia officially stated that it did not plan to revise its strategy in Russia and intended to develop certain business areas in order to expand operations and increase profits. Russia’s Ministry of Industry and Trade also confirmed that it had received an official notice from the company stating that it intended to continue operating in the country. In 2023, Russian LLC Auchan generated 226 billion rubles ($2.67 billion) in revenue. Net profit amounted to 460.2 million rubles ($5.43 million), compared with 4.7 billion rubles ($55.46 million) a year earlier. The company also paid 209.97 million rubles ($2.48 million USD) in windfall tax. In the KSE Institute’s LeaveRussia database, Auchan is classified as “stay,” noting that the company has scaled back part of its operations. Despite reports about a possible sale of the Russian business, the company did not complete its exit from the market: its stores continued to operate and its Russian entity maintained operational activity. As a result, the business the company had spent years trying to preserve has now been placed under temporary management. Nestlé: scaling back, but not leaving In 2022, Nestlé chose a different strategy. The company suspended advertising and capital investment, restricted imports and exports, halted sales of some brands, including KitKat and Nesquik, and said it would keep mainly essential products on the Russian market. Nestlé also stated that it did not expect to make a profit from its Russian business and that any profit generated would be donated to humanitarian organizations. But the business itself remained. As of September 2026, Nestlé had six factories and around 7,000 employees in Russia. In 2021, the company’s sales in Russia amounted to about $2.4 billion, while in 2026 the Russian market accounted for approximately 1% of the group’s global sales. In the LeaveRussia database, Nestlé has a “stay” status. The company reduced its product range and suspended advertising, new investment and part of its imports, but it did not leave the Russian market: its legal entities and production facilities continued to operate, and no sale of the business or complete cessation of operations took place. Nestlé now says that, following the transfer of its assets into temporary management, it is considering all possible options to protect its rights. In other words, the strategy of “staying while minimizing the presence” also failed to protect the assets from Russian state intervention. What about Leroy Merlin? The situation here is somewhat different, and it is important to say so clearly. Leroy Merlin did not leave Russia in 2022, but in March 2023 its parent company Adeo announced that it would transfer control of the Russian business to local management. According to Adeo itself, operational control was transferred only at the end of December 2023. In the LeaveRussia database, Leroy Merlin also has a “stay” status, with a note that the company scaled back operations. Adeo transferred operational control to local management, and the Russian retail chain was renamed Lemana PRO. However, the formal change in the ownership structure and the transfer of operational control were not confirmed as a full and final exit of the group from the Russian business. This is why the company was not classified as “exited.” In December 2023, the formal owner of 99.993% of LLC Le Monlid became UAE-registered Scenari Holding LP, while Adeo retained a 0.007% stake. This was the ownership structure in place when the company was transferred to temporary management. At the same time, throughout 2023, the Russian business remained extremely important to the group. Adeo’s sales in Russia amounted to €6.1 billion ($7 billion) – about one-fifth of the group’s global sales – while its Russian operations generated €287.4 million ($329 million) in net profit, approximately one-quarter of Adeo’s total profit. As such, this case cannot be described in exactly the same way as Auchan or Nestlé. But it is also illustrative: even restructuring and the transfer of operational control did not eliminate the risks surrounding the Russian asset. The former Leroy Merlin business has now also been placed under temporary management. Did those who left really lose? One of the main arguments used by companies that stayed in Russia was quite understandable: exiting is expensive. And that is true. But let us look at what happened to those that nevertheless accepted these costs. A close comparison for Nestlé is Unilever (KSE Status – “exited”). After the start of the full-scale war, the company halted imports to and exports from Russia, advertising and new investments, but continued selling everyday consumer goods produced at its four Russian factories. In October 2024, Unilever completed the sale of its entire business in Russia and Belarus to local company Arnest Group. The parties did not officially disclose the value of the transaction. However, according to the Financial Times, as cited by Reuters, it amounted to approximately €520 million ($596 million). Before the sale, Unilever valued the net assets of its Russian business at around €600 million ($688 million). In other words, the company sold the asset at a discount, but was still able to sell it for hundreds of millions of euros and complete its exit from the Russian market. Nestlé is currently in a different situation: the company did not sell its business and has now lost operational control over it without any announced compensation. Whether it will ultimately be able to recover at least part of the value of these assets will depend not only on the company itself, but also on decisions by the Russian authorities. For example, H&M (KSE status “exited”) announced in July 2022 that it would fully wind down its business in Russia. By Nov. 30, the company had permanently closed all 172 Russian stores, while one-off costs related to the exit amounted to SEK 1.751 billion ($174 million). These were real financial losses. In 2022, H&M’s operating profit fell to SEK 7.17 billion ($711 million). However, it increased to SEK 14.54 billion ($1.37 billion) in 2023, SEK 17.31 billion ($1.64 billion) in 2024, and reached SEK 18.4 billion ($1.88 billion) in 2025, exceeding the pre-war 2021 level of SEK 15.26 billion ($1.78 billion). Net profit after tax in 2025 also exceeded the 2021 level. An even more telling example is McDonald’s. The sale of its Russian business cost the company $1.281 billion in one-off pre-tax charges in 2022. Net profit that year fell to $6.18 billion, compared with $7.55 billion in 2021. But already in 2025, McDonald’s (KSE status “exited”) reported net profit of $8.56 billion – higher than before its exit from Russia. Of course, it would be incorrect to claim that exiting Russia itself drove the subsequent growth of H&M or McDonald’s. The results of global companies are influenced by dozens of factors. But these examples show something else: the companies recognized significant one-off costs related to leaving Russia, completed their Russian exits, and within several years were again posting global financial results at or above pre-war levels. And just as importantly, after leaving they no longer maintained a long-term operational presence in Russia, managed large retail networks there or remained part of the Russian economy under a “stay” status. And one more paradox – Ukraine While Nestlé continued operating in Russia, Russian attacks were destroying the same company’s products in Ukraine. According to a source at Nestlé, after the Russian strike on Aug. 5, 2026 at the Raben Ukraine warehouse in Brovary, products of Purina, Torchyn and Mivina were destroyed. At the time, the amount of the losses had not been disclosed. On Aug. 30, 2026, a Russian attack damaged an Auchan warehouse in Boryspil. The company said that no employees were injured. And this is perhaps the biggest paradox of the entire story. For years, companies explained keeping their Russian businesses by the need to protect employees, consumers and assets. At the same time, their assets and products in Ukraine have been suffering from Russian attacks. And now the Russian state itself is stripping them of control over the businesses that these companies spent all these years trying to preserve. So what is the bottom line? Exiting Russia was not free. Companies lost hundreds of millions and even more than a billion dollars, wrote down assets, sold businesses and left profitable markets. But these were recognized losses. H&M and McDonald’s recognized these costs early on, stopped operating their businesses in Russia and, over the following years, recovered and exceeded their pre-war financial results. The companies that stayed chose a different model: preserve the asset, continue operating and try to wait out the political risk. The events of September 2026 reveal the main problem with this strategy: staying in Russia did not mean preserving the Russian business. Perhaps the question boards of directors should have been asking themselves at the very beginning of the full-scale war was not only, “How much will we lose if we leave?” But also – how much can we lose if we stay? The views expressed in this opinion article are the author’s and not necessarily those of Kyiv Post.