Heineken exits Russia with one-euro sale of operations (updated)

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25/08/2023 09:15

(Adds CEO quotes in paragraphs 9,10,11)
       BRUSSELS, Aug 25 (Reuters) - Dutch brewer Heineken
 HEIN.AS  said on Friday it had completed 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 deal had received
all the required approvals and was likely to leave it with
exceptional losses of 300 million euros ($324.8 million).
    Heineken announced its intention to exit Russia in March
2022, after Russia's invasion of Ukraine, acknowledging that the
process had taken longer than expected.
    "Recent developments demonstrate the significant challenges
faced by large manufacturing companies in exiting Russia," Chief
Executive Dolf van den Brink said in a statement.
    Many multinational companies flocked to leave Russia after
the West imposed unprecedented sanctions on Moscow, but the
Kremlin has retaliated by seizing some assets.
    Some foreign companies trying to exit Russia are facing a
big jump in costs as Moscow is demanding bigger discounts on the
price tags of assets they want to sell, three people with
knowledge of the matter said.
    Russian President Vladimir Putin signed a decree in July to
take control of French yoghurt maker Danone's  DANO.PA  Russian
subsidiary along with beer company Carlsberg's  CARLb.CO  stake
in a local brewer.
    Anheuser-Busch InBev has also said it plans to exit its
joint venture in Russia with Turkey's Efes  AEFES.IS . 
     Asked if the experiences of Danone and Carlsberg had
increased the urgency for Heineken to do a deal, van den Brink
told reporters: "Our concern went up but not the urgency. It
showed there was a real risk of nationalisation and all you
could do was seek to be master of your fate."
    He would not go into details as to why the search for a 
buyer took longer-than-expected, calling the process "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 leave Russia," he added.
     Heineken had seven breweries in Russia and 1,800 employees,
who will receive employment guarantees for the next three years.
    The Dutch brewer removed its Heineken brand from Russia last
year and production of Amstel is to be phased out within six
months.
    Heineken said the deal, with no option to buy the business
back, included a three-year licence for some smaller regional
brands, for which Heineken would not provide brand support or
receive any proceeds.
    Arnest Group owns a major can packaging business and is the
largest Russian manufacturer of aerosols, as well as selling
cosmetics and household goods.   
    Heineken said the transaction will have a negligible impact
on its full-year outlook.
($1 = 0.9237 euros)

 (Reporting by Philip Blenkinsop, additional reportng by
Dominique Vidalon. Editing by Jane Merriman and Sharon
Singleton)
 ((philip.blenkinsop@thomsonreuters.com; +32 2 585 2869:
@reutersPhilB;))