Unilever, the British consumer goods giant known for brands like Dove and Hellmann’s mayonnaise, announced on October 10, 2024, that it has finalized the sale of its Russian operations to Arnest Group, a local manufacturer specializing in perfumes, cosmetics, and household products. The deal includes all of Unilever’s business in Russia, four manufacturing plants, and its operations in Belarus, although the financial terms have not been disclosed.
In a statement, Unilever CEO Hein Schumacher remarked, “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”.
Unilever’s decision to exit Russia comes after facing significant criticism for its continued operations following the invasion of Ukraine in February 2022. The company was one of the first major European food firms to halt imports and exports to Russia but faced backlash for remaining active in the market longer than many peers. Activists from groups such as B4Ukraine have been vocal about urging Western companies to sever ties with Russia.
The Kremlin has mandated that companies from “unfriendly” nations—those imposing sanctions on Russia—must offer a minimum discount of 50% on exit agreements. This regulatory environment has complicated the exit for many businesses. Reports suggest that Unilever’s Russian operations contributed roughly 1% to its overall turnover and net profit prior to the sale.
The withdrawal of foreign companies from Russia has resulted in over $107 billion in losses and write-downs since the onset of the conflict. Earlier this year, Danone also announced plans to divest its Russian holdings, incurring a significant financial loss.
As Unilever transitions away from Russia, CEO Schumacher has also initiated plans to restructure the company by separating its ice cream division and reducing its workforce by up to 7,500 employees. He stated that these changes are part of a broader strategy to focus on 30 core brands amid years of underperformance.
Despite this move being seen as a step towards corporate responsibility, activists have called for further accountability. One activist commented, “It’s about time Unilever decided to align with the right side of history… Genuine actions, not just headlines, will reveal their sincerity”.
For more details on this story, you can refer to CNN’s coverage.
Sources:
[1] https://edition.cnn.com/2024/10/10/business/unilever-sells-its-business-in-russia/index.html
[2] https://www.foodmanufacture.co.uk/Article/2024/10/10/Unilever-sells-Russian-business-for-undisclosed-sum
[3] https://www.cnn.com/2024/10/10/business/unilever-sells-its-business-in-russia/index.html
[4] https://www.euronews.com/business/2024/10/10/unilever-sells-russian-business-as-it-becomes-latest-country-to-leave
[5] https://www.theguardian.com/business/2024/oct/10/unilever-sells-russian-business-after-pressure-from-campaigners
[6] https://www.reuters.com/markets/deals/unilever-completes-sale-russian-business-2024-10-10/
[7] https://uk.finance.yahoo.com/news/unilever-sells-russian-business-becomes-134039296.html
[8] https://www.coloradopolitics.com/unilever-sells-russian-business-arm/article_f3908144-75ec-5577-8477-77c8f82a85b9.html
[9] https://tribune.com.pk/story/2501980/unilever-sells-russian-business-to-arnest-group-amid-ongoing-multinational-exodus