Shares of the owner of KitKat and Nespresso fell after it lost control of its assets in Russia

Shares of Swiss food manufacturer Nestlé fell by more than 2% during trading on Friday, September 18. The decline came amid Russia’s decision to transfer the company’s assets in the country to the temporary management of the local firm “L.E.V. Management.” Similar measures have been applied to the Russian operations of the French retail chain Auchan and “Lemana Pro”—a former Russian asset of the French company Leroy Merlin.

Nestlé stated that it has taken note of the Russian president’s decree and is exploring its options, according to CNBC. “Nestlé is committed to taking all necessary steps to protect its rights and ensure the continuity of its business operations in the interests of all stakeholders, especially its employees,” the company said in a statement to the network.

CNBC calls the Kremlin’s decision unexpected. It is seen as a first step toward transferring assets to investors friendly to the Russian government and part of a new wave of pressure on Western businesses that continue to operate in Russia, the network added. This is the largest seizure of foreign companies’ assets in Russia since at least 2024, according to Bloomberg. Politics was one of the factors in the decision, Kremlin spokesman Dmitry Peskov noted in a statement to Reuters. Although the spokesperson did not specifically mention Switzerland and France, he noted that the countries in question are those that are “most actively involved in military operations” against Russia, Reuters reports.

The Swiss State Secretariat for Economic Affairs said it is “concerned” about the Kremlin’s actions regarding Nestlé and is working with the company to “lift the temporary administration,” Bloomberg reported.

CNBC was unable to reach a spokesperson for Auchan for comment. The French chain owns 230 stores in Russia, as well as an online business, and employs about 30,000 people, according to Reuters. “Lemana Pro” declined to comment to the TV network.

The Russian president signed a decree, effective in 2023, granting Russian authorities the right to place assets belonging to individuals or organizations from countries that Moscow considers “unfriendly” under temporary administration. Since then, control has shifted, for example, in the Russian operations of France’s Danone, Denmark’s Carlsberg, and Finland’s Fortum.

This article was AI-translated and verified by a human editor