25 Aug 2023 10:49

Heineken exits Russian market, sells assets for 1 euro to Arnest group without buyback option

MOSCOW. Aug 25 (Interfax) - Heineken N.V. has sold its Russian assets to the Arnest group for a symbolic price of 1 euro.

According to Heineken N.V., the deal has received all the necessary approvals, thereby resulting in Heineken, which had owned seven breweries in Russia, recording a loss of about 300 million euros.

The terms and conditions of the deal do not envisage an option to repurchase the assets.

Arnest also committed to repay the 100 million euro debt owed by Heineken's Russian business.

Production of the Amstel brand in Russia will be discontinued within 6 months, and no other international brands within the group's perimeter will be licensed in Russia. Heineken, the company's flagship brand, ceased production in Russia last year.

However, existing three-year licenses for small local brands, which are necessary to ensure the continuity of their activities and close the deal, will remain. Heineken will not provide any support to the brands, nor will it receive income or royalties from Russian.

"Recent developments highlight the significant challenges large manufacturing companies face in leaving Russia. And while it took much longer than we hoped, the deal provides a livelihood for our employees and allows us to exit the country responsibly," Heineken CEO Dolph van den Brink said.

Arnest Group is a major Russian manufacturer of perfumes, cosmetics and household products in aerosol packaging.

In September last year, the group acquired the aluminum beverage can business from US-based Ball Corporation. At the beginning of the year, the business changed its name to Arnest Packaging Solutions.

In March last year, Heineken announced that it would stop new investments and exports to Russia, and cease production, sales and advertising of its flagship Heineken brand. Initially, the company had planned to leave the Russian market in the first half of 2023.

Heineken United Brewery LLC owns seven breweries and is one of the top-three Russian beer producers.

In 2022, the company's net profit totaled 2.6 billion rubles versus 878.9 million rubles in 2021. Revenue increased to 42 billion rubles from 36.9 billion rubles in 2021.

The Heineken portfolio includes about 300 brands, including the brands Heineken, Amstel, Birra Moretti, Desperados, Foster's, Newcastle Brown Ale, Sagres, Sol, Star, Strongbow, Tecate, Tiger, etc. National brands in Russia included Okhota, Zhigulevskoye, Stepan Razin, Bochkarev and others.