Heineken exits Russia at a loss of €300mn
Heineken exits Russia at a loss of €300mn

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How long did it take for the Dutch beer group to exit Russia following its full-scale invasion of Ukraine, with Heineken eventually selling its Russian operations for a €300 million loss?

Heineken is selling its seven breweries and 1,800 employees to Russian manufacturer Arnest Group for €1. The deal is expected to result in a loss of 300 million euros, the company said on Friday.

While many European companies have announced plans to sell or close their Russian operations after the invasion, some have been slow to withdraw, citing the size of their operations or the need to protect employees still in the country.

The brewer has pulled brands including Heineken, Miller and Guinness from shelves in Russia, but Amstel continues to sell them, partly to maintain the local business Development continues and local management has introduced new products.

“Without Amstel, the company would likely go bankrupt and there is a real risk of being nationalized,” the company has said in the past.

Chief executive Dolf van den Brink said on Friday: “Recent developments have shown the significant challenges facing large manufacturing companies exiting Russia. While it is taking much longer than we had hoped, this deal safeguards the livelihoods of our employees , and enable us to leave the country in a responsible manner.”

Founded by Yale professor Jeff Sonnenfeld global list Foreign companies trading in Russia have accused some Western groups that have not yet left Russia of breaking promises.

Responding to his criticism this year, Heineken said it had struggled to move the business to buyers amid challenging circumstances.

It added that the Russian business was closed and self-financed, with no money exchanged between Heineken and the local business. The deal took several months to win regulatory approval.

As part of the deal, Heineken said “a number of smaller regional brands will be licensed for three years to ensure business continuity and transaction approval”.

But the company said it would not provide any branding support and would not receive any proceeds, royalties or fees from Russia. There is no option in the agreement to buy back or otherwise return to Russia.

Arnest Group has agreed to amortize historical intercompany debt of 100 million euros owed to Heineken by its Russian operations. The Dutch brewer said its full-year 2023 outlook would not be affected by the sale.

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