Unilever has completed the sale of its controversial Russian subsidiary to Arnest Group, a local manufacturer of perfume, cosmetics, and household products.
The sale includes all of the consumer goods giant’s business in Russia and its four factories in the country. An operation in Belarus was also included in the sale.
“Over the past year, we have been carefully preparing the Unilever Russia business for a potential sale,” said Hein Schumacher, CEO of Unilever.
“This work has been very complex, and has involved separating IT platforms and supply chains, as well as migrating brands to Cyrillic.
“The completion of the sale ends Unilever Russia’s presence in the country”.
Terms of the deal were not disclosed.
Unilever’s decision to continue trading in Russia has attracted criticism after many Western brands pulled out after the invasion of Ukraine. The unit only contributed approximately 1% to the group’s turnover and net profit last year.
Arnest has long been Unilever’s contract manufacturer in the country. Since the start of the war, it has acquired around $1bn worth of local assets from Western companies that have left Russia, including Heineken and the Ball Corporation.
NAM Implications:
- At 1% of global sales, no great financial loss to Unilever…
- …except in terms of ‘global coverage’.
- Meanwhile, the move should satisfy murmurings in shareholder ranks.
- But given Arnest has long been Unilever’s contract manufacturer in the country…
- ….the business will be in ‘safe hands’.
- …allowing Unilever a smooth return to Russia following an inevitable change in the political climate.
