Heineken NV said it completed a deal to sell its assets and leave Russia, becoming one of the few consumer companies to successfully withdraw since Vladimir Putin’s government shifted rules to make exiting the country more difficult.
The Dutch firm sold its operations, including seven breweries, to Russia-based packaging and consumer goods business Arnest Group for €1 ($1.08) in a deal that will result in a €300 million loss. The transaction has received all required approvals, Heineken said in a statement, and concludes a process started in March 2022.
There is no buyback or call option to return to Russia, and the sale and financial loss will have a “negligible impact” on Heineken’s earnings per share, the company said. Its full-year outlook won’t change, it said.
Putin’s signing of a decree in April that allows for temporary state control over the assets of companies or individuals from unfriendly states — which includes the US and its allies — has complicated efforts by top consumer companies to exit Russia. Heineken’s successful departure stands in contrast to rival Carlsberg A/S, which saw plans to sell its business in the country upended by the government’s seizure of operations in July. Meanwhile, Anheuser-Busch InBev continues to hold an interest in a Russian beer maker.
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“This was incredibly complex,” Heineken’s Chief Executive Officer Dolf van den Brink said on a call with reporters. “There was a real risk of prosecution for our people and a real risk of nationalization.”
Heineken has been facing pressure from consumers to leave Russia, which had accounted for about 2% of global sales, and had stated its intention to do so more than a year ago without profiting from a transaction. In April it said it had submitted an application for approval with the Russian government to sell the business. It previously recorded total impairment losses of €210 million related to its Russia operations.
The new owner won’t have the right to sell the Heineken brand in Russia under the terms of the deal, the CEO said, and the Amstel brand will also be removed from the market. “Our intention was to pull as many international brands out as possible so we’re very happy that the Amstel brand, which is the second largest brand, is coming out,” he said.
Arnest has been the buyer of Western company assets in Russia in the past, acquiring Ball Corp.’s beverage packaging business for $530 million in September 2022.
Heineken had about 1,800 employees in Russia and Arnest will provide employment guarantees for the next three years, Heineken said. The Russian buyer will also assume about €100 million in debt related to the Heineken operations. Heineken’s Russia operations made losses for six of the last eight years, according to the company.