Heineken (HEIN.AS) of the Netherlands announced on Friday that it has concluded its exit from Russia by selling its operations there to Russia’s Arnest Group for a symbolic one euro.
The world’s second-largest brewer said the transaction had acquired all necessary clearances and would result in exceptional losses of 300 million euros ($324.8 million).
After Russia’s invasion of Ukraine, Heineken declared its plan to exit Russia in March 2022, admitting that the process had taken longer than intended.
“Recent developments demonstrate the significant challenges faced by large manufacturing companies in exiting Russia,” Chief Executive Dolf van den Brink said in a statement.
After the West slapped unprecedented sanctions on Moscow, many global corporations fled the country, but the Kremlin retaliated by seizing some assets.
Some international companies attempting to flee Russia are encountering significant cost increases as Moscow demands greater discounts on the price tags of assets they want to sell, three people with knowledge of the matter said.
Heineken’s exit strategy
Anheuser-Busch InBev has also announced plans to depart its joint venture in Russia with Efes (AEFES.IS) of Turkey.
When asked if Danone and Carlsberg’s experiences had raised the pressure for Heineken to strike a deal, van den Brink told reporters, “Our concern went up but not the urgency. It showed there was a real risk of nationalization, and all you could do was seek to be master of your fate.”
He refused to go into specifics about why the search for a buyer went longer than expected, describing the process as “highly complex.”
“We are happy we found a suitable buyer. We believe it is a reliable party…We are happy this process comes to an end and to be able to exit Russia,” he added.
Heineken had seven breweries in Russia and employed 1,800 people, who will be given job security for the next three years.
The Dutch brewer removed its Heineken brand from Russia last year, and Amstel production will be phased out in six months.
Heineken stated that the deal contained a three-year license for several smaller regional brands, for which Heineken would not give brand assistance or receive any proceeds.
Arnest Group operates a significant can packaging business and is Russia’s largest manufacturer of aerosols, in addition to retailing cosmetics and household items.
Heineken stated that the deal would have no effect on its full-year expectations.