Unilever has officially exited Russia, completing the sale of its subsidiary.
- The Russian and Belarusian divisions were sold to Arnest Group, a local manufacturer.
- Campaigners pressured Unilever to leave due to claims linking its activities to the Russian-Ukraine conflict.
- The sale, valued significantly lower than expected, underscores a strategic retreat from the region.
- Other FMCG giants have also reduced operations in Russia amid challenging conditions.
Unilever has wrapped up its operations in Russia by selling its subsidiary to the Russian firm Arnest Group, marking the company’s departure from the region. CEO Hein Schumacher confirmed the sale, which encompasses Unilever’s entire business presence in Russia, including its four factories. The decision also involves its Belarusian division, illustrating a comprehensive withdrawal from these markets.
The transaction with Arnest Group, which produces perfumes, cosmetics, and household products, is reportedly valued between £300 million and £334 million. This valuation reflects about a 50% cut from its previous value, highlighting the financial impact of geopolitical pressures and market conditions.
The sale followed significant advocacy from campaigners urging Unilever to cease operations in Russia due to accusations that its business dealings indirectly supported the Russian-Ukraine war. Earlier in the year, the company faced calls for the revocation of its royal warrant, a mark of recognition granted by the UK’s monarchy, alongside other firms like Mondelez and Nestlé, which have faced similar scrutiny for their Russian associations.
Hein Schumacher stated the complexity involved in disentangling Unilever’s operations, such as separating IT systems and supply chains, and adapting brand identities to Cyrillic script for the local market. This extensive preparation enabled the smooth transition of assets and operations to Arnest Group, effectively concluding Unilever’s presence in Russia.
This strategic retreat is not isolated, as other FMCG companies have similarly re-evaluated their positions in the region. For instance, Danone had to transfer control of its operations earlier this year, demonstrating the volatility and risks businesses face in maintaining a foothold under current geopolitical tensions.
Unilever’s exit from Russia signifies a broader trend of multinational companies reassessing their operations amid geopolitical tensions.
