The acquisition will see McDonald’s entire outlet portfolio, including 154 McCafé outlets, operate under a new brand | Photo credit: Andrii Kordis

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McDonald’s is selling its business in Russia in an agreement that will see the chain’s 847 McDonalds restaurants and 154 McCafé stores in the country operate under a new brand.

After more than 30 years of operations in the Russia McDonald’s has entered into a sale and purchase agreement with its existing licensee Alexander Govor. Approximately 62,000 existing McDonald’s employees will be retained for at least two years, on equivalent terms, the US fast food chain said.

Prior to the invasion of Ukraine, McCafé held a 4.2% coffee-focused segment share in Russia, with 19 new outlets opening in the last year.

Coffee Like is the segment leader with 811 outlets in the Russian branded coffee shop market, which exceeded 4,300 before the invasion of Ukraine.

Russia has seen an array of western brands suspend or fully withdraw operations as a result of the Ukraine crisis. Seattle-based coffee chain Starbucks exited the Russian market, permanently closing 130 stores, earlier this month. Finnish coffee, beverage and food supplier Paulig has also completed the sale of its business in Russia, as has Finnish coffee cup and packaging giant Huhtamaki.

Costa Coffee owners Coca-Cola anticipate the decision to suspend its business in Russia, where it operates less than 30 Costa Coffee stores, would negatively impact revenues by 1-2% for the year.