7 ms·

Heineken sells its Russia operations for 1 euro

36 points by lxm 3y ago

pazimzadeh 3y ago
> The Russian government requires foreign companies to provide a 50% on their businesses after government-selected consultants value them, Reuters reported. Is there a word missing? 50% tax? > It also requires foreign companies to contribute of 10% of their business' sale price to the Russian budget. to contribute of?
- VincentEvans 3y ago
  Russian government has taken extremely hostile angle towards foreign owned businesses attempting to leave Russia. That is - if they stay and continue to operate - the government leaves them for the most part alone, at least for now. Any businesses attempting a sale or reduction in operations are targeted for government action ranging from huge portion of sale proceeds forfeited, forced takeovers etc. Businesses will remember this costly lesson for a long time as far as foreign investments in Russia are concerned.
  - af78 3y ago
    I disagree about this part: “if they stay and continue to operate - the government leaves them for the most part alone” Foreign businesses are known to have been coerced to make ‘voluntary donations’ to the military. Here’s an example: https://sanctions.nazk.gov.ua/en/boycott/13/ https://sanctions.nazk.gov.ua/en/boycott/13/ See also: Russia’s subsidiary of Danone seized, its director replaced by a nephew of Chechen warlord Kadyrov. https://www.reuters.com/business/retail-consumer/chechen-leaders-nephew-new-head-russias-danone-subsidiary-media-2023-07-19/ https://www.reuters.com/business/retail-consumer/chechen-lea... Chechen leader's 'dear' nephew made head of seized Danone subsidiary in Russia
    - VincentEvans 3y ago
      From the Danone link you posted: “Russia says it has been forced to act to ensure that operations continue at important businesses whose Western owners have declared they are exiting. But it may be difficult for investors to regain control of the assets. …and further down: "We will undoubtedly see more of these actions. But there should, at least for now, be no threat to western companies which either have said they intend to stay in Russia or have specifically not said they are looking to exit." However, this is just arguing small points, because when I stated that business that continue to operate “generally left alone, for now” is hand-wavy enough to allow for a spectrum of bullshit and uncertainty that makes it rather difficult to operate, and an environment where laws are pretend. Personally, I feel that any business that continues to operate in Russia tacitly contributes to war and props up the regime, one way or another. Its immoral.
      - af78 3y ago
        Thanks for expanding.
- dkjaudyeqooe 3y ago
  Copy editing issues are not new, but what shocks me is that they seem to be proliferating just as the tools for grammar and spell checking have vastly improved. Even the free Google checker you get in most of their products seems to give me a false positive one in a blue moon and almost never misses a mistake. Surely you could automate these issues away, like not accept copy unless it passed an automatic copy editing tool.
- deleted 3y ago
  [deleted]
hkgjjgjfjfjfjf 3y ago
[dead]
eatonphil 3y ago
I'm not sure exactly how to read this. Selling a business once worth $325M for $1 could either be interpreted as that the business has become worthless, or that the seller gave a gigantic gift to the buyer.
- borissk 3y ago
  Not if the contract says that in the next 5 years the seller can buy back the business from the buyer for say $5M.
  - soligern 3y ago
    Either way the buyer wins.
    - dubcanada 3y ago
      That's the point. It's how tons of Russians made a lot of money.
      - FirmwareBurner 3y ago
        > It's how tons of Russians made a lot of money Selling public/state assets and infrastructure on the cheap, far below objective market value, in the hands of well connected "private investors", is how many wealthy people got even richer in the west as well, it's not something Russian oligarchs invented. Ask the Brits how the privatization of their national railways went, or the Germans how much better their telecom infrastructure is after privatization, or you probably know other examples closer to your home wherever you live.
        local_issues 3y ago
        [dead]
    - andrewxdiamond 3y ago
      The buyer is providing a service
borissk 3y ago
Most foreign companies that sold their Russian businesses have put an option in the contract allowing them to buy it back in say 5 years for a fixed sum. So to a degree a temporary transfer of ownership, rather than real sale.
- TillE 3y ago
  Five years is an extremely optimistic timeline for EU-Russia relations returning to anything close to normal.
  - borissk 3y ago
    Selling beer in Russia is not sanctioned by EU. The reason most companies are leaving is the public outcry - if the war continues for 6+ years that may cool down.
    - oneshtein 3y ago
      Russia started war with Ukraine in 2014.
      - FirmwareBurner 3y ago
        Yes, and the sanctions put by the cowardly west only applied to companies operating in occupied Crimea. So then Russians businesses had spin-off subsidiaries operating in Crimea under different names so the holding companies wouldn't fall under western sanctions, making the sanctions basically worthless and just a smokescreen to continue doing business as usual with Russia.
- sushibowl 3y ago
  According to Dutch news there is no such option for this deal, this is a permanent transfer (source in Dutch: https://nos.nl/l/2487917 https://nos.nl/l/2487917 Heineken's Russian division was difficult and never very profitable, so they are likely glad to be rid of it. Even if they have to write off a 300 million euro loss on it.
lsllc 3y ago
Dupe from yesterday (well, same story different outlet) https://news.ycombinator.com/item?id=37260152 https://news.ycombinator.com/item?id=37260152
neom 3y ago
DW did a 20 minute report on brands and their relationship with Russia yesterday: https://www.youtube.com/watch?v=5ktPF9Hb7BU https://www.youtube.com/watch?v=5ktPF9Hb7BU
rasz 3y ago
Stupid. They could have burned everything to the ground instead.
catboybotnet 3y ago
This is the norm, no company "pulls out" of Russia, they just hand off the whole business to a proxy company they own (directly or indirectly), that will continue to sell the same product and service. It's just for show, they still continue operations.

36 points by lxm 3y ago

> The Russian government requires foreign companies to provide a 50% on their businesses after government-selected consultants value them, Reuters reported. Is there a word missing? 50% tax? > It also requires foreign companies to contribute of 10% of their business' sale price to the Russian budget. to contribute of?

VincentEvans 3y ago
Russian government has taken extremely hostile angle towards foreign owned businesses attempting to leave Russia. That is - if they stay and continue to operate - the government leaves them for the most part alone, at least for now. Any businesses attempting a sale or reduction in operations are targeted for government action ranging from huge portion of sale proceeds forfeited, forced takeovers etc. Businesses will remember this costly lesson for a long time as far as foreign investments in Russia are concerned.
- af78 3y ago
  I disagree about this part: “if they stay and continue to operate - the government leaves them for the most part alone” Foreign businesses are known to have been coerced to make ‘voluntary donations’ to the military. Here’s an example: https://sanctions.nazk.gov.ua/en/boycott/13/ https://sanctions.nazk.gov.ua/en/boycott/13/ See also: Russia’s subsidiary of Danone seized, its director replaced by a nephew of Chechen warlord Kadyrov. https://www.reuters.com/business/retail-consumer/chechen-leaders-nephew-new-head-russias-danone-subsidiary-media-2023-07-19/ https://www.reuters.com/business/retail-consumer/chechen-lea... Chechen leader's 'dear' nephew made head of seized Danone subsidiary in Russia
  - VincentEvans 3y ago
    From the Danone link you posted: “Russia says it has been forced to act to ensure that operations continue at important businesses whose Western owners have declared they are exiting. But it may be difficult for investors to regain control of the assets. …and further down: "We will undoubtedly see more of these actions. But there should, at least for now, be no threat to western companies which either have said they intend to stay in Russia or have specifically not said they are looking to exit." However, this is just arguing small points, because when I stated that business that continue to operate “generally left alone, for now” is hand-wavy enough to allow for a spectrum of bullshit and uncertainty that makes it rather difficult to operate, and an environment where laws are pretend. Personally, I feel that any business that continues to operate in Russia tacitly contributes to war and props up the regime, one way or another. Its immoral.
    - af78 3y ago
      Thanks for expanding.
dkjaudyeqooe 3y ago
Copy editing issues are not new, but what shocks me is that they seem to be proliferating just as the tools for grammar and spell checking have vastly improved. Even the free Google checker you get in most of their products seems to give me a false positive one in a blue moon and almost never misses a mistake. Surely you could automate these issues away, like not accept copy unless it passed an automatic copy editing tool.
deleted 3y ago
[deleted]

hkgjjgjfjfjfjf 3y ago

[dead]

eatonphil 3y ago

I'm not sure exactly how to read this. Selling a business once worth $325M for $1 could either be interpreted as that the business has become worthless, or that the seller gave a gigantic gift to the buyer.

borissk 3y ago
Not if the contract says that in the next 5 years the seller can buy back the business from the buyer for say $5M.
- soligern 3y ago
  Either way the buyer wins.
  - dubcanada 3y ago
    That's the point. It's how tons of Russians made a lot of money.
    - FirmwareBurner 3y ago
      > It's how tons of Russians made a lot of money Selling public/state assets and infrastructure on the cheap, far below objective market value, in the hands of well connected "private investors", is how many wealthy people got even richer in the west as well, it's not something Russian oligarchs invented. Ask the Brits how the privatization of their national railways went, or the Germans how much better their telecom infrastructure is after privatization, or you probably know other examples closer to your home wherever you live.
      - local_issues 3y ago
        [dead]
  - andrewxdiamond 3y ago
    The buyer is providing a service

borissk 3y ago

Most foreign companies that sold their Russian businesses have put an option in the contract allowing them to buy it back in say 5 years for a fixed sum. So to a degree a temporary transfer of ownership, rather than real sale.

TillE 3y ago
Five years is an extremely optimistic timeline for EU-Russia relations returning to anything close to normal.
- borissk 3y ago
  Selling beer in Russia is not sanctioned by EU. The reason most companies are leaving is the public outcry - if the war continues for 6+ years that may cool down.
  - oneshtein 3y ago
    Russia started war with Ukraine in 2014.
    - FirmwareBurner 3y ago
      Yes, and the sanctions put by the cowardly west only applied to companies operating in occupied Crimea. So then Russians businesses had spin-off subsidiaries operating in Crimea under different names so the holding companies wouldn't fall under western sanctions, making the sanctions basically worthless and just a smokescreen to continue doing business as usual with Russia.
sushibowl 3y ago
According to Dutch news there is no such option for this deal, this is a permanent transfer (source in Dutch: https://nos.nl/l/2487917 https://nos.nl/l/2487917 Heineken's Russian division was difficult and never very profitable, so they are likely glad to be rid of it. Even if they have to write off a 300 million euro loss on it.

lsllc 3y ago

Dupe from yesterday (well, same story different outlet) https://news.ycombinator.com/item?id=37260152 https://news.ycombinator.com/item?id=37260152

neom 3y ago

DW did a 20 minute report on brands and their relationship with Russia yesterday: https://www.youtube.com/watch?v=5ktPF9Hb7BU https://www.youtube.com/watch?v=5ktPF9Hb7BU

rasz 3y ago

Stupid. They could have burned everything to the ground instead.

catboybotnet 3y ago

This is the norm, no company "pulls out" of Russia, they just hand off the whole business to a proxy company they own (directly or indirectly), that will continue to sell the same product and service. It's just for show, they still continue operations.