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23 Apr, 2023 07:51

German industrial giant to take hit on Russia exit

Henkel has announced it will sell its assets to a consortium of local investors
German industrial giant to take hit on Russia exit

German consumer goods giant Henkel AG expects a net financial loss as it exits Russia, the company announced this week without disclosing the scale of the damage.  

Henkel revealed on Thursday that it had signed an agreement to sell its business in Russia to a consortium of local investors for 54 billion rubles ($661 million).

The group includes companies such as Augment Investments, Kismet Capital Group, and Elbrus Services. Henkel stressed that the buyers were not subject to EU or US sanctions, adding that they had “long-standing business relationships in Western countries.” 

Commenting on losses incurred from leaving Russia, the manufacturer pointed out that the amount would depend on exchange rates during the transaction. It added that it would provide further details on the deal in its first-half earnings release in August.   

A former Henkel plant in Leningrad Region will maintain production and jobs after the departure of the consumer goods giant, the deputy head of the region, Dmitry Yalov, announced on Friday.  

Henkel, which is a major producer of cleaning products, detergents, and glue, has been working in Russia for more than 30 years and has operated 11 production sites in the country. It announced its withdrawal last year along with a large number of other Western companies, following the onset of the conflict between Russia and Ukraine.

For more stories on economy & finance visit RT's business section

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