Unilever discontinues operations in Russia
Following consistent criticism from the Western world and approval from the Russian administration, Unilever has transferred its possessions to the Russian Arnest Group. At the helm of the company is Alexei Sagal, who has a history of procuring Western properties.
Unilever has officially withdrawn from Russia. The renowned British manufacturer of consumer goods declared the completion of the sale of its Russian subsidiary to the Arnest Group, a Russian firm specializing in fragrances, cosmetics, and household items. The transaction encompassed the entire business, as well as four factories and operations in adjacent Belarus. Unilever stayed silent on specifics, but as reported by the Financial Times, the deal totaled 520 million euros.
Just a month ago, Unilever was allegedly given the green light to sell its Russian assets by the Russian government. The Kremlin mandates a 50% discount on exit deals with corporations from countries it labels "unfriendly," which includes those that have imposed sanctions against Russia due to its invasion of Ukraine, such as Britain. Additionally, a "leave tax" of at least 15% is imposed.
Unilever's continued activities in Russia had been garnering mounting criticism. The company made headlines in March 2022 as the first significant European corporation to halt imports and exports to and from Russia. However, Unilever had not publicly announced intentions to depart from the Russian market before.
"Last year, we meticulously prepared Unilever Russia for a potential sale," CEO Hein Schumacher stated in a Reuters-cited release. "This process was intricate and involved disentangling IT platforms and supply chains, as well as renaming brands to the Cyrillic script." He added that the sale's completion signaled Unilever's exit from Russia.
Financial Losses
Since Russia invaded Ukraine, the Arnest Group has already procured the local properties of US can manufacturer Ball Corp, Dutch brewer Heineken, and Swedish cosmetics company Oriflame. The firm is owned by Russian industrialist Alexei Sagal, who has emerged as one of Russia's primary beneficiaries since the breakup of the USSR, as per the Financial Times. Sagal often secures properties at substantial discounts. For instance, Heineken sold its business to Arnest for a nominal price of one euro, resulting in a 300 million euro loss.
The exodus of businesses from Russia has resulted in foreign corporations losing over $107 billion due to write-offs and lost income, according to a Reuters analysis from March. In January, Danone announced the approval it received to divest its Russian assets, leading to a loss of $1.3 billion.
Unilever's decision to sell its Russian subsidiary to the Arnest Group, a company specializing in consumer goods like fragrances, cosmetics, and household items, marks the end of its operations in Russia. Despite the discount offered by the Russian government for companies leaving the market, the sale of Unilever's Russian subsidiary to Arnest Group amounted to 520 million euros.
