(Oct 10): Unilever Plc sold its Russian subsidiary to local manufacturer Arnest Group, exiting the country more than two-and-a-half years after its invasion of Ukraine.

The maker of Dove soap and Knorr stock cubes said the sale includes all of Unilever’s business in the country, including its four factories there, as well as its unit in Belarus.

“The sale ends Unilever Russia’s presence in the country,” chief executive officer Hein Schumacher said in a statement Thursday. “This work has been very complex, and has involved separating IT platforms and supply chains, as well as migrating brands to Cyrillic.”

The financial terms weren’t disclosed, but a report from local media outlet RBC in September said the business was valued at as much as 40 billion rubles (US$411 million or RM1.7 billion), reflecting the discounts applied by local authorities to make it harder for multinationals to exit Russia.

Arnest, a Russian maker of perfume, cosmetics, and household products, has previously snapped up Western companies’ operations in Russia. It acquired Heineken NV’s assets in the country for €1 last year, and Ball Corp.’s beverage packaging business for US$530 million in September 2022.

Unilever’s Russia business employs about 3,000 people, with net assets of around €600 million.

Unilever came under criticism for remaining in Russia long after the invasion. A Ukrainian anti-corruption body added the London-based company to its list of “International Sponsors of War” last year.

While Unilever and rival Nestle SA condemned Russia’s February 2022 invasion, they continued to supply consumers in the country with products like Magnum ice cream and Nescafe coffee. For some multinationals, sales in the country rose.

Yet the Kremlin also made it difficult to leave. Besides applying mandatory discounts to valuations, it also seized control of western assets when companies tried to go. This happened to yogurt maker Danone, which eventually managed to negotiate an exit, and Danish brewer Carlsberg A/S, which is fighting the seizure in the courts.

Uploaded by Magessan Varatharaja