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Heineken N.V. (OTCQX:HEINY) announced on Friday that it completed the transaction to sell its Russia operations to Arnest Group. The beer giant noted that transaction has received all the required approvals and concludes the process the company initiated in March of 2022 to exit Russia.
As a result of exiting Russia, Heineken (OTCQX:HEINY) expects total non-cash exceptional losses amounting to €300M including cumulative foreign exchange losses relating to Russia currently recorded in equity. The estimated loss includes a commitment from Arnest Group to repay the historical intercompany debt of the Russian business of approximately €100M due to Heineken in installments. As for the impact on earnings, the transaction will have negligible impact on diluted EPS and Heineken's (OTCQX:HEINY) full year 2023 outlook is unchanged from the sale.
Heineken (OTCQX:HEINY) said no other international brands will be licensed in Russia with the exception of a 3-year license for some smaller regional brands, which are required to ensure business continuity and secure transaction approval. The Amsterdam-based company will provide no brand support and will receive no proceeds, royalties or fees from Russia. In addition, Heineken (OTCQX:HEINY) noted that there is no call option to return to Russia.
Heineken CEO Dolf van den Brink said: “We have now completed our exit from Russia. Recent developments demonstrate the significant challenges faced by large manufacturing companies in exiting Russia. 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."