Heineken is the latest Western corporate giant to exit Russia

By James Rogers

Russia's Arnest Group is taking over Heineken's operations in the country

Beer giant Heineken N.V. is the latest Western company to exit Russia, announcing Friday the sale of its Russian operations to Arnest Group for one euro.

Under the terms of the deal, all of Heineken's remaining assets, including seven breweries in Russia, will transfer to the new owners, the beer giant said in a statement. The Russian Arnest Group has also taken over responsibility for Heineken's 1,800 employees in Russia.

Heineken began the process of exiting Russia in March 2022, following that country's invasion of Ukraine. The company said it expects to incur a total cumulative loss of EUR300 million ($324.1 million) as a result of its exit.

"We have now completed our exit from Russia. Recent developments demonstrate the significant challenges faced by large manufacturing companies in exiting Russia," Heineken CEO Dolf van den Brink said in a statement. "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."

Related: Unilever CEO vows to look at Russian operations with 'fresh eyes' as pressure to exit the country mounts

A number of major Western corporations, including U.S. giants Apple Inc. (AAPL), Alphabet Inc. (GOOGL)(GOOGL), Amazon.com Inc. (AMZN), International Business Machines Corp. (IBM) and McDonald's Corp. (MCD), have left Russia in response to Moscow's February 2022 invasion of Ukraine.

Earlier this week, DP Eurasia, the master franchiser of the Domino's Pizza Inc. (DPZ) brand in Turkey, Russia, Azerbaijan and Georgia, also announced its exit from Russia.

But Heineken is "no hero," according to Mark Dixon, the founder of the Moral Rating Agency, an organization set up after the invasion of Ukraine to examine whether companies were carrying out their promises of exiting Russia. "It failed to leave Russia for a year and a half," he told MarketWatch via email. "The explanation that it took longer than expected doesn't hold water, because of course it's difficult to find a buyer if you remain so long a pariah state."

The Ukraine Solidarity Project said that Heineken's move should increase the pressure on companies that remain in Russia, such as consumer-goods giant Unilever PLC . "The point here is that major companies, like @Heineken, are and have taken loses of hundreds of millions and billions in leaving the Russian market. It is possible," the Ukraine Solidarity Project tweeted Friday. "We're sure @Unilever can do it, too."

Related: WeWork, Carl's Jr., Unilever and Shell among companies slammed by Yale over operations in Russia

The Ukraine Solidarity Project recently launched a high-profile campaign urging Unilever to get out of Russia, using images of Ukrainian veterans injured in the war with Russia. Last month, activists from the Ukraine Solidarity Project held up a giant poster featuring the veterans outside Unilever's London headquarters.

The Moral Rating Agency has also reiterated its calls for Unilever to end its Russian operations.

"We have always said we would keep our position in Russia under close review," a Unilever spokesperson told MarketWatch earlier this month. The spokesperson also directed MarketWatch to a statement on the war in Ukraine that the company released in February 2023.

-James Rogers

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

08-26-23 1304ET

Copyright (c) 2023 Dow Jones & Company, Inc.