Nestlé shares dropped 1.5 percent to CHF 77.17 on Friday, marking their lowest level in three and a half months, after Russian President Vladimir Putin ordered two Nestlé subsidiaries—Nestlé Russia and Nestlé Kuban—into temporary state administration.
The Swiss holdings in both entities will be managed by the Russian firm L.E.V. Management. Nestlé remains the legal owner but has lost control over its Russian operations. The French supermarket chain Auchan was similarly affected by the decree.
According to Bloomberg, the move represents the largest seizure of foreign corporate assets by Russia since at least 2024. Russia justified the forced administration on the grounds that Switzerland and other affected countries originate from "unfriendly nations." Switzerland aligned itself with European Union sanctions against Russia in 2022 following Moscow's invasion of Ukraine.
Nestlé's Russian revenue is estimated at between CHF 1 billion and CHF 2 billion, representing roughly 1 to 2 percent of group sales. The book value of its Russian business is between CHF 1.5 billion and CHF 1.7 billion. The company operates six factories in Russia and employs approximately 7,000 people there.
"We view the decree as a step toward a potential change of ownership," said Warren Ackerman, an analyst at Barclays, told Bloomberg. "Nestlé will take all necessary measures to protect its rights and ensure continued operations in the interest of its employees," the company said in a statement.
The pattern echoes previous cases. France's Danone sold its Russian business in 2024 for approximately €180 million after authorities placed it under temporary administration, booking a total loss of €1.2 billion. Carlsberg exited Russia at the end of 2024 through a management buyout valued at $320 million. Heineken transferred its Russian subsidiary for a symbolic €1 and recorded a €300 million loss; neither company saw a lasting impact on their share prices.
JPMorgan analysts flagged the possibility of Nestlé losing its Russian business in mid-August, estimating that a forced sale with minimal proceeds could reduce earnings per share by roughly 3 to 4 percent. Jefferies warned the impairment could reach approximately CHF 1 billion.
Vontobel said the impact on Nestlé's overall revenue would be marginal but noted the development is negative for market sentiment and increases the risk of an asset write-down or an unfavorable disposal.
