Finnish dairy products firm Valio announced on Tuesday that it is selling off its Russian operations to a food products company in the country, due to Russia's invasion of Ukraine.
"Russia's attack on Ukraine made it impossible to continue our operations in Russia, both ethically and from a business perspective. Exiting from Russia has proved difficult in this situation because of the constantly changing legislation and the reciprocal sanctions," Valio CEO Annikka Hurme said in a company statement.
We have sought out solutions and a suitable buyer throughout spring. With the transaction, we will complete this process and our operations in Russia will end," Hurme continued.
Valio said has completed negotiations about divesting its Russian operations, which will be transferred to food products firm Velkom Group immediately, noting that both companies agreed to not publicly disclose the deal's value.
The firm said it decided to withdraw from Russia on 7 March.
Viola brand to live on
The operations being sold off include the firm's Russian operation and a processed cheese plant in Ershovo, a city just west of Moscow.
The transaction also shifts ownership of Valio's Viola-branded processed cheese that is produced and marketed in Russia, giving the new owners the option to continue selling the product in the country.
Valio's annual net sales in Russia in 2020 amounted to around 87 million euros, accounting for five percent of approximately 1.8 billion euros of its global net sales.
It will take some time before Valio-branded products are no longer available on store shelves in Russia, according to the firm, as remaining packaging and products will be sold until sell-by dates.
The company said that Velkom Group is required to stop using Valio brands sold in Russia that are not part of the transaction by the end of this year, within the agreed transitional period.