UK consumer goods giant Unilever announced on Thursday, October 16 that it sold its Russian business to Arnest Group, a local producer of perfume, cosmetics, and household products, for a confidential sum.
Unilever to Cut 7,500 Jobs, Spin Off Ice Cream Business
According to ET Retail, Unilever, the maker of Dove soap and Hellmann’s mayonnaise, yesterday sold all of its business in Russia, including four factories and operations in neighbouring Belarus. The terms of the sale were not disclosed. After the Russian exit, in his first year, Unilever’s Chief Executive Hein Schumacher said he would spin off the ice cream business, cut as many as 7,500 jobs and focus on 30 key brands to improve performance.
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Following the invasion of Moscow over Ukraine in February 2022, Unilever’s stay in Russia faced fierce criticism from campaigners and Ukraine’s government. However, in March 2022, it was the first major European food company to stop imports and exports with Russia. B4Ukraine, a group of civil society organisations, praised Unilever’s decision to sell its assets and urged other global companies to follow suit.
Russia exits cost $107 billion to Unilever
Recently, RBC reported that Unilever got approval from the Russian government to sell assets worth about 35-40 billion roubles ($359.5-$410.9 million). “Over the past year, we have been carefully preparing the Unilever Russia business for a potential sale. This work has been very complex, and has involved separating IT platforms and supply chains, as well as migrating brands to Cyrillic,” Schumacher released a statement, citing the Russian alphabet.
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Meanwhile, the Kremlin requires at least a 50% discount on exit deals with companies from “unfriendly” countries that have sanctioned Russia. Arnest Group didn’t immediately comment. The departure of companies from Russia has cost over $107 billion in writedowns and lost revenues, according to Reuters in March. Earlier this year, Danone said it got regulatory approval to sell its Russian assets, taking a $1.3 billion loss.
Looking ahead, Unilever will release its third-quarter trading statement on Oct. 24.
