Reckitt completes the next stage of withdrawal from the Russian market
British manufacturer of consumer goods Reckitt Benckiser officially agreed to sell its Russian business in the field of hygiene products to the company Ernest Management. Thus, the company continues to implement the strategy of gradual withdrawal from Russia, which it first announced back in 2022 after the start of a full-scale war.
At that time, many international corporations found themselves under strong pressure from investors, governments and consumers to continue operating in the Russian market. Since then, most global brands have either left the country entirely or started looking for buyers for their local assets.
What assets are transferred to the new owner
Within the agreement Ernest Management will receive Reckitt's production site in Moscow, the rights to a local Russian brand, as well as approx 400 employees, who worked at the enterprise.
At the same time, the company emphasizes that international brands are not sold. Trademark rights Durex, Nurofen, Strepsils, Veet, Vanish, Calgon, Cillit Bang and other global products remain owned by Reckitt. In addition, the British manufacturer still maintains part of its activities in the Russian healthcare segment.
Why the company will not receive the full value of the assets
One of the main problems for international companies leaving Russia remains state restrictions on capital withdrawal.
Reckitt notes that precisely because of these rules, the company will receive only part of the proceeds from the sale of the business. Such conditions have already become common for foreign investors who sell their Russian assets: often deals are made at a significant discount, and the received funds cannot be fully transferred outside the country.
The sale will cost the company more than $230 million
In connection with the sale of assets, Reckitt predicts loss after tax in the amount of about 233 million dollars according to the results of the year.
Of this amount, approx 166 million dollars the company will reflect it already in the financial statements for the first half of the year. However, management notes that the transaction should not materially impact adjusted operating income or earnings per share.
Why international companies continue to leave Russia
The sale of Reckitt's assets is part of a large-scale process of withdrawal of Western businesses from the Russian market, which has been ongoing for more than four years.
For most international companies, working in Russia has become associated not only with reputational risks, but also with financial constraints, business difficulties, currency controls and high regulatory risks. That is why many global manufacturers are selling local assets even at significant losses.
Reckitt remains one of the largest manufacturers of consumer goods
Reckitt Benckiser operates more than 200 countries of the world and produces a wide range of products for health, hygiene and household. The company's portfolio includes world-famous brands Durex, Nurofen, Strepsils, Veet, Vanish, Calgon, Cillit Bang and dozens of other brands.
The sale of the Russian division shows that even large international corporations continue to review their presence in the Russian market, despite the significant financial losses that such an exit requires.
EN
