Unilever withdraws from Russia: A clear signal to the Kremlin

The consumer goods giant Unilever has sold its Russian assets for 520 million euros to the entrepreneur Alexey Sagal, known as the 'Hairspray King'. This marks the end of a controversial chapter for the London-listed company, which activists accused of supporting the war by remaining in Russia. Unilever, known for brands such as Marmite, Dove, and Hellmann's, announced on Thursday the sale to the Arnest Group, the leading manufacturer of perfumes, cosmetics, and household products in Russia. The entrepreneur Alexey Sagal, who benefited from the exit of Western companies from Russia, previously acquired, among others, Heineken's Russian subsidiary as well as assets from Oriflame and the Ball Group. These acquisitions enabled him to significantly expand his company, supported by regulations mandating the sale of Western assets at significant discounts to Russian buyers. Since Russia's invasion of Ukraine, Sagal has emerged as one of the country's most prominent businessmen. For his contribution to the Russian economy, he was awarded a state medal. His acquisitions strategically focus on long-term growth in the food, alcohol, and ice cream sectors. The sale includes all four of Unilever's Russian factories and the business area in Belarus. Despite Unilever not disclosing the terms of the sale, the Financial Times reports a purchase price of 520 million euros. The decision was made after massive criticism, including allegations that Unilever was indirectly financing warfare through its business in Russia. The withdrawal is welcomed by organizations such as the campaign group B4Ukraine, which highlight the importance of curbing the Kremlin's war funds. After nearly 1,000 days of Ukraine's resistance, activists see 'no excuses' for other large food and beverage companies to continue doing business in Russia. The situation for Western companies in Russia remains tense as they simultaneously face public pressure to withdraw and the threat of state expropriation, following new laws that grant control over Western assets due to sanctions. A Unilever spokesperson emphasized that preparing the Russian business units for sale was a complex task, which included, among other things, the separation and migration of IT platforms and supply chains.