Unilever finalizes exit from Russia
Date
10/16/2024 5:35:47 AM
(MENAFN) British consumer-goods giant Unilever has officially finalized its exit from Russia, a move announced in a statement on Thursday. This decision comes in the wake of mounting criticism directed at the company for remaining operational in Russia while many other firms withdrew following the onset of the Ukraine conflict in 2022 and the subsequent imposition of Western sanctions.
Unilever's Russian operations have been sold to Arnest Group, a domestic manufacturer specializing in perfume, cosmetics, and household products. The deal also encompasses Unilever’s business interests in Belarus. CEO Hein Schumacher confirmed that this sale marks the end of Unilever’s presence in the Russian market.
While the specifics of the deal have not been publicly disclosed, it is important to note the regulatory framework imposed by the Russian government for companies exiting the market. As per the divestment rules introduced last year, firms must secure government approval for any sales and are mandated to sell their assets at a minimum of 50 percent off their market value, in addition to paying an exit tax of 10-15 percent.
Reports from the Financial Times (FT) indicate that Unilever's assets in Russia, estimated to be worth around EUR600 million (USD657 million), were sold for approximately EUR520 million (USD569 million). Unilever’s operations in Russia included four manufacturing facilities and represented about 1 percent of the company's overall turnover and net profit in 2023.
Arnest Group, which has previously acquired local assets from several international companies, including US can maker Ball Corp, Dutch brewer Heineken, and Swedish cosmetics firm Oriflame, is owned by Russian industrialist Aleksey Sagal. This acquisition adds to Arnest's portfolio as it continues to expand its influence in the Russian consumer goods market.
Unilever's exit is a significant step in the ongoing realignment of business interests in Russia, reflecting broader economic shifts resulting from geopolitical tensions. The company’s decision underscores the complex challenges multinational corporations face when navigating operations in politically sensitive environments.
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