After a “complex” sale process, Unilever announced on Thursday that it had sold its Russian business to Arnest Group. This makes Unilever the latest multinational corporation to exit Russia since its invasion of Ukraine.
According to Unilever, which is based in the UK and owns brands like Dove soap and Hellmann’s mayonnaise, the sale includes all of its business, as well as four factories in Russia and Belarus.
The Financial Times cited unidentified sources to report that the sale was worth 568.41 million euros, though the terms of the deal were not made public.
Unilever did not confirm the reported figure, but as of June 30, the Russian business, which includes the four factories, had net assets of approximately 600 million euros.
Hein Schumacher, CEO of Unilever, said in a statement, “This work has been very complex, and has involved separating IT platforms and supply chains, as well as migrating brands to Cyrillic.” He was referring to the sale and the translation of the English alphabet into the Russian alphabet.
Since Russia’s invasion of Ukraine, Arnest, led by businessman Alexey Sagal, has acquired other Western businesses, most notably the Russian operations of Dutch brewer Heineken for just one euro.
In the latter half of 2022, Arnest also acquired the Russian operations of Swedish cosmetics company Oriflame and Ball Corp’s beverage packaging business for $530 million.
Campaigners and the government of Ukraine have criticized Unilever for its continued presence in Russia following the invasion in February 2022, despite the fact that it was the first major European food company to stop exporting to and importing into Russia.
The “least bad” option, as stated by Unilever last year, was to “pursue our business but in a highly constrained manner,” according to the company.
The sale was welcomed on Thursday by B4Ukraine, a coalition of civil society organizations working to force Western companies to cut ties with Russia.
The RBC business daily reported last month that Unilever had received approval from the Russian government to sell assets worth 359.5-410.9 million dollars.
Exit deals involving businesses from nations it describes as “unfriendly,” or those that have imposed sanctions on Russia, typically attract a discount from the Kremlin that is at least 50% larger than the original price.
According to a March Reuters analysis, the exodus of Russian businesses has cost foreign businesses more than $107 billion in writedowns and lost revenue.
In the beginning of this year, Danone stated that it had received regulatory approval to sell its Russian assets, resulting in a $1.3 billion loss.
On October 24, Unilever is anticipated to release its trading statement for the third quarter.
