Heineken, the world’s second-largest brewer, has officially exited the Russian market, selling its assets to Russian consumer goods maker Arnest Group. The deal, valued at €1, includes the transfer of ownership of Heineken’s seven local breweries and other assets in Russia to Arnest Group. The transaction received all necessary approvals from Russian authorities, effectively concluding Heineken’s exit process that began in March 2022.
The decision to exit the Russian market was made in response to Western sanctions imposed on the country due to the conflict in Ukraine. Heineken’s namesake beer brand disappeared from Russia shortly after the announcement of the intention to exit. The sale of its Russian business resulted in an expected cumulative loss of €300 million for Heineken.
Arnest Group has provided job guarantees for Heineken’s 1,800 local employees for the next three years. Additionally, the Russian company has pledged to repay the historical intercompany debt of the Russian business to Heineken, amounting to approximately €100 million.
As part of the deal, Heineken will phase out the production of its Amstel beer brand in Russia within the next six months. However, some smaller regional brands will retain a three-year license and continue to be produced at Heineken’s former breweries. Heineken will not receive earnings from the sales of these products or provide brand support.
The sale of Heineken’s Russian assets follows a similar move by Danish Carlsberg Group, which handed over control of its local assets to the Russian Federal Property Management Agency after announcing its divestment plans. Heineken’s CEO, Dolf van den Brink, cited the nationalization of Carlsberg’s assets as a key factor in expediting the sale of its own local business.
The exit from the Russian market marks a strategic adjustment for Heineken as it navigates geopolitical challenges and seeks to focus its efforts on markets that offer better prospects for growth. The company’s move to sell its Russian assets to Arnest Group ensures business continuity and provides opportunities for both organizations to pursue their respective objectives in the market.
It will be interesting to observe how Arnest Group leverages its acquisition of Heineken’s local breweries and other assets to further strengthen its position in the Russian consumer goods industry. The deal represents a significant expansion for Arnest Group, which is primarily known for its cosmetics and household goods manufacturing capabilities.
In conclusion, Heineken’s exit from the Russian market, facilitated by the sale of its assets to Arnest Group, signals the completion of its strategic move to focus on markets with more favorable conditions for growth. The deal ensures the continuity of business operations and safeguards the interests of Heineken’s employees in Russia. As both companies move forward, they will have the opportunity to pursue their respective goals and contribute to the dynamic Russian consumer goods industry.