Nestlé Shares Fall After Russia Seizes Control of Local Operations

Nestlé (NESN) shares declined after Russia placed the company's local business unit under temporary external administration, escalating a trend of asset seizures targeting firms from so-called "unfriendly" countries. The stock fell 1.5% in early Friday trading following the announcement.

Kremlin Tightens Grip

A presidential decree was used to put Nestlé's Russian operations under state control. In response, the Swiss consumer goods company stated it is currently weighing its options. "Nestle is committed to taking all necessary steps to protect its rights and ensure continuity of business operations in the interests of all stakeholders, particularly its employees," the company said.

The new decree also reportedly targeted the Russian operations of French supermarket chain Auchan. This move is the latest in a series of actions by Moscow to control foreign-owned assets since the 2022 invasion of Ukraine.

Financial Exposure

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Nestlé has maintained a significant, albeit reduced, presence in Russia since the conflict began, arguing it provides essential food products. The company's exposure in the country includes:

• Six factories as of its 2025 annual report, producing coffee, pet care, and infant formula.
• Approximately 7,000 employees.
• Roughly 2 billion Swiss francs ($2.4 billion) in Russian sales in 2021, the last year the company disclosed such figures.

Context of Asset Seizures

Russia has been using a 2023 decree signed by President Vladimir Putin to place assets under temporary state administration. This mechanism has been applied to a growing list of multinational corporations, including the Russian businesses of Finnish utility Fortum, French yogurt maker Danone, and Danish brewer Carlsberg. The process has often led to forced sales at significant discounts, frequently benefiting buyers with connections to the Kremlin.