Dutch brewer Heineken announced on Friday that it has completed its exit from the Russian market by selling its operations to Arnest Group for a symbolic price of one euro. The deal, which has received all required approvals, marks the end of Heineken’s presence in Russia. The decision to leave the Russian market was made by Heineken in March 2022, following Russia’s invasion of Ukraine. Heineken acknowledged that the exit process took longer than anticipated, but the completion of the deal marks a significant milestone for the company.
The sale of Heineken’s operations in Russia is expected to result in exceptional losses of 300 million euros ($324.8 million). Despite the financial impact, Heineken is determined to complete the exit due to the challenges posed by operating in Russia amidst geopolitical tensions. Chief Executive Dolf van den Brink expressed the significance of recent developments, stating that the experiences of other large manufacturing companies exiting Russia highlighted the real risk of nationalization.
Heineken had a significant presence in Russia, operating seven breweries and employing 1,800 people. As part of the deal, the employees will receive employment guarantees for the next three years, ensuring their job security even after Heineken’s exit.
The decision to exit Russia comes as many multinational companies have chosen to leave the country in response to unprecedented sanctions imposed by the West. These sanctions have escalated tensions between Russia and Western nations, making it increasingly challenging for companies to operate. In addition, there is a constant risk of asset seizure by the Kremlin as a retaliatory measure.
Heineken’s exit from Russia aligns with the broader trend of multinational companies reevaluating their presence in the country. Danone and Carlsberg are among the companies that have experienced similar challenges and have decided to leave Russia. The decision to exit the market is not taken lightly, as it involves significant financial implications and the need to ensure a smooth transition.
Despite the challenges faced by large manufacturing companies in exiting Russia, Heineken remains optimistic about its future prospects. The company will now be able to focus on strengthening its presence in other markets and allocating resources strategically. The completion of the exit from Russia represents a turning point for Heineken and underscores its commitment to navigating the complex global business landscape.
