Heineken sells Russia holdings for 1 euro

For the price of a single euro, Heineken has sold its operations in Russia, completing an exit the giant Dutch brewer first announced within weeks of Russia’s invasion of Ukraine last year.

Heineken said Friday that it had sold its seven breweries and other assets in Russia to Arnest Group, a packaging and consumer goods business based in Stavropol, Russia. The deal will result in a loss of about $325 million, Heineken said, adding that Arnest will take responsibility for Heineken’s 1,800 employees in Russia, guaranteeing their jobs for three years.

“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,” Dolf van den Brink, Heineken’s chief executive officer, said in a statement.

After Russia’s invasion of Ukraine in February 2022, hundreds of Western companies announced that they would quit operating in Russia, but actually selling their assets and withdrawing has taken time.

Under new rules put in place by the Kremlin after the imposition of Western sanctions over the invasion, foreign companies in Russia can sell their assets only with approval from Russia’s Finance Ministry, which can take six to 12 months. Businesses in certain sectors, including oil and banking, also need a signoff from President Vladimir Putin. Some companies have delayed their withdrawal until a suitable employer is found for their workers.

Critics say the delays suggest an unwillingness to leave, and Heineken faced a boycott after news media reports said its Russian subsidiary kept selling Amstel beer last year.

On Friday, the brewer said the Heineken brand was removed from Russia last year, and that production of Amstel would “be phased out within six months.” It said that the sale of its operations would have a negligible effect on the group’s earnings, and that its full-year forecast for earnings in 2023 was unchanged.

For Arnest, it was at least the second time it has picked up the Russian subsidiary of a Western company. In September, Arnest acquired the Russian operations of Ball Corp., a Colorado-based manufacturer of containers. The deal included three plants producing aluminum cans for beer and soft drinks in Moscow, Leningrad and the Chelyabinsk regions, Arnest said. In that case, Arnest paid $530 million.