Heineken Sells Russian Operations for $1.08 (Not Billions or Millions, Just $1.08)
Heineken N.V. has sold its Russian operations to Russia’s Arnest Group for 1 euro. That’s right, about $1.08 as of this morning. Heineken expects to take a loss of about $325 million on the deal.
That hefty purchase price includes seven breweries and 1,800 employees, who have been guaranteed employment for three years. It’s not clear what they will be brewing, as the Heineken brand was removed from Russia in 2022 and production of Amstel will be phased out within six months.
Arnest did agree to repay “the historical intercompany debt of the Russian business of approximately €100m due to Heineken in installments,” according to today's announcement.
Heineken’s process to exit Russia apparently began in March 2022. “Recent developments demonstrate the significant challenges faced by large manufacturing companies in exiting Russia,” said Dolf van den Brink, Heineken’s s chairman and CEO. “While it took much longer than we had hoped, this transaction secures the livelihoods of our employees and allows us to exit the country in a responsible manner.”
“Recent developments” include the surprise seizures of the local operations of Danone and Carlsberg in July. And a host of other Western companies have exited the country in various ways since Russia's invasion of Ukraine.
“No other international brands will be licensed in Russia with the exception of a three-year license for some smaller regional brands, which are required to ensure business continuity and secure transaction approval,” today’s announcement said. “Heineken will provide no brand support and will receive no proceeds, royalties or fees from Russia.”
Arnest Group owns a major can packaging business – thanks to another Western company’s flight – and is the largest Russian manufacturer of cosmetics, household goods and metal packaging for consumer goods, according to the Heineken announcement.
In September, Arnest acquired the Russian operations of Ball Corp. The deal included three plants producing aluminum cans for beer and soft drinks in Moscow, Leningrad and the Chelyabinsk regions, according to the New York Times. In that case, Arnest paid $530 million.
