Dutch brewing giant Heineken has finalized the sale of its operations in Russia, following through on its previously announced exit strategy amid Russia’s invasion of Ukraine.
Heineken recently confirmed the sale of its seven breweries and associated assets to Arnest Group, a consumer goods company based in Stavropol, Russia. This transaction, valued at a symbolic €1, will result in a loss of €300 million (approximately $325 million) for Heineken.
In addition to the asset sale, Arnest Group will take on responsibility for Heineken’s 1,800 employees in Russia, ensuring their job security for a period of three years. Heineken’s CEO, Dolf van den Brink, noted the extended timeline for the transaction but highlighted that the deal secures their employees’ livelihoods and allows for a responsible exit from the country.
“We have now completed our exit from Russia. Recent developments demonstrate the significant challenges faced by large manufacturing companies in exiting Russia,” he said in a statement. “While it took much longer than we had hoped, this transaction secures the livelihoods of our employees and allows us to exit the country in a responsible manner.”
Amid Russia’s military actions in Ukraine, many Western companies initially announced their intentions to leave the Russian market; however, actually divesting assets and withdrawing operations has proven to be a time-consuming process. This is due to new regulations put forth by the Kremlin, requiring approval from Russia’s finance ministry, which can take up to a year, and in certain sectors, authorization from President Vladimir Putin.
Heineken’s move to sell its operations follows concerns of potential delays in exiting the market. The company had faced criticism for allegedly continuing to sell Amstel beer in Russia even after announcing its exit. The company has now clarified that production of Amstel will be phased out within six months.
Arnest Group’s acquisition of Heineken’s Russian operations marks its second major deal with a Western company’s Russian subsidiary, having previously acquired Ball Corporation’s Russian operations for $530 million in September. Despite the financial loss, Heineken has stated that the sale will not significantly impact the company’s earnings forecast for 2023.
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