HEINEKEN completes sale of Russian operations to Arnest Group

Dutch brewing giant HEINEKEN announced today the completion of its transaction to sell its Russian operations to Arnest Group. This move finalizes HEINEKEN’s exit from Russia, a process initiated in March 2022. All required approvals for the transaction have been received, concluding a phase that incurs an expected total cumulative loss of €300m for HEINEKEN.

Arnest Group Assumes Responsibility for HEINEKEN’s Russian Assets

Arnest Group, a dominant player in can packaging and the largest Russian manufacturer of cosmetics and household goods, purchased HEINEKEN’s Russian business for €1, acquiring 100% of the shares. The sale includes the transfer of all remaining assets, including seven breweries in Russia, to Arnest Group.

HEINEKEN finalizes exit from Russia, Arnest Group takes over. Photo courtesy of Rattakarn from Pixabay.

Employment Guarantees and Phased-Out Brands

Arnest Group has committed to providing employment guarantees for the 1,800 HEINEKEN employees in Russia for the next three years. Furthermore, production of the Amstel brand will be phased out within six months, following the earlier removal of the Heineken brand from Russia in 2022.

No Brand Support from HEINEKEN in Russia

No other international brands will be licensed in Russia, with the exception of a three-year license for some smaller regional brands. These licenses are required to ensure business continuity and secure transaction approval. HEINEKEN will not provide brand support, nor will it receive any proceeds, royalties, or fees from Russia.

Financial Impact and Future Outlook

As a result of the transaction and its exit from Russia, HEINEKEN expects total non-cash exceptional losses of €300m, including cumulative foreign exchange losses related to Russia. This sum also includes Arnest Group’s commitment to repay approximately €100m of historical intercompany debt to HEINEKEN in instalments. The sale will have a negligible impact on diluted EPS (beia), and HEINEKEN’s full-year 2023 outlook remains unchanged.

CEO’s Statement on Exiting Russia

HEINEKEN’s CEO and Chairman of the Executive Board, Dolf van den Brink, commented: “We have now completed our exit from Russia. Recent developments demonstrate the significant challenges faced by large manufacturing companies in exiting Russia. 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.”

The completion of this transaction underscores HEINEKEN’s strategic decision to exit Russia while ensuring the well-being of its employees and fulfilling all required approvals. With Arnest Group taking over, both companies look forward to new chapters in their respective markets.