Heineken Sells Its Business in Russia for 1 Euro
For the price of a single euro, Heineken has sold its operations in Russia, completing an exit the giant Dutch brewer first announced within weeks of Russia’s full-scale invasion of Ukraine last year.
Heineken said Friday it had sold its seven breweries and other assets in Russia to Arnest Group, a packaging and consumer goods business based in Stavropol, Russia. The deal will result in a loss of €300 million (about $325 million), Heineken said, adding that Arnest will take responsibility for Heineken’s 1,800 employees in Russia, guaranteeing their jobs for three years.
“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,” Dolf van den Brink, Heineken’s chief executive, said in a statement.
After Russia’s invasion of Ukraine in February 2022, hundreds of Western companies announced they would quit operating in Russia, but actually selling their assets and withdrawing has taken time.
Under new rules put in place by the Kremlin after the imposition of Western sanctions over the invasion, foreign companies in Russia can sell their assets only with approval from Russia’s finance ministry, which can take six to 12 months. Businesses in certain sectors, including oil and banking, also need a sign-off from President Vladimir V. Putin. And some companies have delayed their withdrawal until a suitable employer is found for their workers.
Critics say the delays suggest an unwillingness to leave, and Heineken faced a boycott after news media reports said that its Russian subsidiary kept selling Amstel beer last year.
On Friday, the brewer said that the Heineken brand was removed from Russia last year, and that production of Amstel would “be phased out within six months.” It said that the sale of its operations would have a negligible effect on the group’s earnings, and that its full-year forecast for earnings in 2023 was unchanged.
For Arnest, it was at least the second time it has picked up the Russian subsidiary of a Western company. In September, Arnest acquired the Russian operations of Ball Corporation, the Colorado-based manufacturer of containers. The deal included three plants producing aluminum cans for beer and soft drinks in Moscow, St. Petersburg and the Chelyabinsk regions, Arnest said. In that case, Arnest paid $530 million.
