Heineken Sells Russian Business for Symbolic 1 Euro amidst Market Exit
Withdrawal from the Ukrainian-Russian war escalations
Following the alarming developments in the Ukrainian-Russian war, foreign-funded enterprises have been steadily pulling out of the Russian market. However, the Kremlin has retaliated by seizing select foreign-funded assets. In a press release on Friday, Heineken, the global brewer ranked second by market value, announced its decision to sell its Russian business to Russia’s Ernest Group for a mere one euro (approximately NT$34) and officially depart from the Russian market.
The international media reports suggest that Heineken currently operates seven breweries in Russia, employing around 1,800 individuals. As part of this deal, the company has guaranteed the job security of its employees for the next three years. The transaction has obtained all the necessary approvals, yet it is anticipated to result in a significant loss of 300 million euros (approximately NT$10.28 billion) for Heineken.
Unexpected prolonged withdrawal timeline
Evidently, Heineken had initially planned to withdraw from Russia by March 2022 following Russia’s invasion of Ukraine. However, the withdrawal process took longer than expected. Dolf van den Brink, the CEO of Heineken, emphasized that major manufacturers confront significant challenges when exiting the Russian market.
The Russian market purge
In tandem with Heineken’s symbolic sale and market exit, Russia has also taken control of French yogurt maker Danone’s Russian subsidiary in July, along with acquiring a stake in beer company Carlsberg’s Russian brewery. Likewise, beer giant AB InBev (AB InBev) intends to withdraw from its joint venture with Turkey’s AEFES in Russia.
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[Sianel Ariannol / Adroddiad Cynhwysfawr]After the start of the Ukrainian-Russian war, foreign-funded enterprises withdrew from the Russian market one after another, but the Kremlin retaliated by confiscating some foreign-funded assets. On Friday, Heineken, the world’s second largest brewer by market value, announced that it would sell its Russian business to Russia’s Ernest Group for a symbolic one euro (about NT$34) and withdraw from the Russian market.
According to foreign media reports, Heineken has 7 breweries in Russia with 1,800 employees. In this sale case, his employees have a guarantee of employment for the next 3 years. Heineken said the transaction has received all the necessary approvals and is estimated to result in a huge loss of 300 million euros (about NT$10.28 billion).
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It is understood that after Russia invaded Ukraine, Heineken expected to withdraw from Russia in March 2022, but the withdrawal time was longer than originally expected. Heineken CEO Dolf van den Brink said major manufacturers face major challenges in leaving Russia.
In addition to Heineken selling its Russian business for a symbolic 1 euro and exiting the market, Russia also took control of the Russian subsidiary of French yogurt maker Danone in July, as well as a stake in beer company Carlsberg’s Russian brewery. Separately, beer giant AB InBev (AB InBev) also said it plans to withdraw from a joint venture with Turkey’s AEFES in Russia.
☆Drinking too much alcohol is harmful to your health and drinking and driving is prohibited☆
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