Heineken, the renowned Dutch brewing giant and the world’s second-largest beer producer by volume, has announced the successful divestment of its Russian operations, marking a complete exit from the Russian market.
The milestone deal saw Heineken finalise the sale of its Russian assets to the Arnest Group for a mere 1 euro, resulting in an anticipated cumulative loss of 300 million euros.
Having secured all the necessary regulatory clearances, Heineken officially wrapped up the process it initiated in March 2022 to fully withdraw from the Russian market.
The company has emphasised that there will be no provisions for a potential reentry into the Russian market in the future.
As part of the transaction, the Arnest Group, a Russian corporation, takes over ownership of Heineken’s production facilities within the country, along with its workforce of 1,800 employees.
The Arnest Group has committed to providing job security to these employees over the next three years, ensuring a smooth transition.
In addition to the flagship Heineken brand, which was already withdrawn from the Russian market in 2022, the production of Amstel beer will be gradually phased out within the next six months.
Heineken has clarified that there will be no authorisation for the licensing of any other international brands in Russia, except for a limited 3-year licensing period for select regional brands. This measure is aimed at maintaining business continuity and facilitating the approval of the transaction.
With this divestiture, Heineken will cease to offer brand support and will not receive any form of revenue, royalties, or fees from its former Russian operations.
The deal is anticipated to result in an exceptional financial loss of €300 million for Heineken. This figure accounts for cumulative exchange rate discrepancies linked to the Russian market. However, the company has reassured stakeholders that the impact on its earnings per share will be negligible. Furthermore, this transaction is not expected to disrupt Heineken’s 2023 financial forecast.
“We have completed our exit from Russia,” stressed Heineken CEO Dolf van den Brink, for whom recent events demonstrate the significant challenges faced by large manufacturing companies when exiting Russia.
“While it took much longer than expected, this transaction secures the livelihoods of our employees and allows us to exit the country responsibly,” he added.
