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business Wednesday 18 May 2022
De-Arching: McDonald’s to sell Russia business, exit country

By DAVID KOENIG and DEE- McDonald’s first restaurant
ANN DURBIN in Russia opened in the
AP Business Writers middle of Moscow more
McDonald’s is closing its than three decades ago,
doors in Russia, ending an shortly after the fall of the
era of optimism and in- Berlin Wall. It was a power-
creasing the country’s isola- ful symbol of the easing of
tion over its war in Ukraine. Cold War tensions between
The Chicago burger giant the United States and Sovi-
confirmed Monday that it et Union, which would col-
is selling its 850 restaurants lapse in 1991.
in Russia. McDonald’s said Now, the company’s exit is
it will seek a buyer who will proving symbolic of a new
employ its 62,000 workers in era, analysts say. Sytch,
Russia, and will continue to who lived in Russia when
pay those workers until the McDonald’s entered the
deal closes. market and remembers the
“Some might argue that excitement surrounding the
providing access to food opening, said the closing
and continuing to employ signifies a reversal to the
tens of thousands of ordi- Soviet era of isolation.
nary citizens, is surely the “It’s really painful to see
right thing to do,” McDon- the many years of gains on
ald’s President and CEO The oldest of Moscow’s McDonald’s outlets, which was opened on Jan. 31, 1990, is closed on Aug. the democratic front being
Chris Kempczinski said in a 21, 2014. Associated Press wiped out with this atro-
letter to employees. “But it cious war in Ukraine,” he
is impossible to ignore the rarily closing its stores in Rus- during the hit to their bot- management and organi- said.
humanitarian crisis caused sia but would continue to tom lines from pausing or zations at the University of Kempczinski left open the
by the war in Ukraine.” pay its employees. It was closing operations in the Michigan’s Ross School of possibility that McDonald’s
McDonald’s said it’s the a costly decision. Late last face of sanctions. Others Business, said McDonald’s could someday return to
first time the company has month, the company said it have stayed in Russia at and others also face pres- the Russian market.
ever “de-arched,” or exit- was losing $55 million each least partially, with some sure from customers, em- “It’s impossible to predict
ed a major market. It plans month due to the restau- facing blowback. ployees and investors over what the future may hold,
to start removing golden rant closures. It also lost French carmaker Renault their Russian operations. but I choose to end my
arches and other symbols $100 million worth of inven- said Monday that it would “The era where compa- message with the same
and signs with the com- tory. sell its majority stake in Rus- nies could avoid taking a spirit that brought McDon-
pany’s name. McDonald’s McDonald’s has also sian car company Avtovaz stance is over,” Sytch said. ald’s to Russia in the first
said it will also will keep its closed 108 restaurants in and a factory in Moscow to “People want to be associ- place: hope,” he wrote in
trademarks in Russia and Ukraine and continues to the state — the first major ated with companies that his employee letter. “Thus,
take steps to enforce them pay its employees there. nationalization of a foreign do the right thing. There’s let us not end by saying,
if necessary. Western companies have business since the war be- much more to business __ ‘goodbye.’ Instead, let us
McDonald’s said in early wrestled with extricating gan. and life __ than maximizing say as they do in Russian:
March that it was tempo- themselves from Russia, en- Maxim Sytch, a professor of profit margins.” Until we meet again.”q

Buffett’s firm reveals new stakes in

Paramount, Citigroup

By JOSH FUNK of Activision Blizzard will go made and which invest-
AP Business Writer through. ments were made by Berk-
OMAHA, Neb. (AP) — War- But Monday’s Securities shire’s two other investment
ren Buffett’s company on and Exchange Commission managers. But Buffett typi-
Monday revealed all the filing also revealed new cally handles all the com-
investment moves it made stakes in Citigroup, Ally Fi- pany’s larger investments
in the first quarter, when it nancial, media company worth more than $1 billion,
spent more than $51 billion Paramount Global, insurer such as Berkshire’s stakes
on stocks. Markel, chemical mak- in Apple, Bank of America
But Buffett had already er Celanese Corp., and and Coca-Cola. Buffett
shared the biggest invest- pharmaceutical distributor and other Berkshire officials
ments with Berkshire Hath- McKesson Corp. don’t comment on these Warren Buffett, chairman and CEO of Berkshire Hathaway,
away shareholders at the Berkshire also added 2 mil- quarterly stock filings. speaks following the annual Berkshire Hathaway shareholders
company’s recent annual lion General Motors shares Recent SEC filings showed meeting in Omaha, Neb., May 5, 2019.
meeting. That means in- to give it 62 million shares that Berkshire continued Associated Press
vestors already knew that of the automaker during a buying Occidental Petro- stocks, including trimming shire owns an eclectic as-
he had invested heavily in quarter when its cash pile leum shares after the first its holdings in grocer Kroger sortment of more than 90
Chevron, Occidental Pe- shrank to $106 billion from quarter ended and it now and Verizon Communica- companies, including BNSF
troleum and HP Inc. during $147 billion because of all holds more than 15% of the tions, and eliminating in- railroad, several major utili-
the quarter, while picking of its stock purchases. oil producer’s stock. vestments in drugmakers ties, Geico and other insur-
up nearly 4 million more The filing Berkshire submit- In addition to all the new Abbvie and Bristol Myers ers, and an assortment of
Apple shares and betting ted Monday doesn’t make investments, Berkshire did Squibb. manufacturing and retail
that Microsoft’s acquisition clear which moves Buffett sell off nearly $10 billion in Besides investments, Berk- companies.q