British American Tobacco has struck an agreement to sell its businesses in Russia and Belarus, the company announced Thursday, more than 18 months after Moscow’s full-scale invasion of Ukraine sparked a mass exodus of Western firms from Russia.
BAT (BTI) said in a statement that it had entered into a formal sales agreement with a consortium led by members of the management team of its Russian operations. It expects the deal to complete within the next month, it added.
“Upon completion, BAT will no longer have a presence in Russia or Belarus and will receive no financial gain from ongoing sales in these markets,” the company said.
A BAT spokesperson declined to comment on sale price.
In February, the company said its 2022 results had been dented by a £612 million ($764 million) charge related to its Russian and Belarusian businesses. Impairment charges — that is, a sharp reduction in the assets’ value — made up most of that amount.
BAT’s Russian and Belarusian businesses account for about 2.7% of its revenue.
The $72 billion company said as far back as March last year, shortly after outbreak of the war, that its ownership of the Russian business was “no longer sustainable in the current environment.”
But since then, the Kremlin has made it increasingly difficult for Western companies to withdraw from Russia and obliges them to pay a hefty fee to the government on selling their assets.
Dutch beer maker Heineken announced its departure from the country last month, saying it had sold its Russian business for a symbolic €1 ($1).
Company CEO Dolf van den Brink said in a statement at the time that the process had taken “much longer” than hoped and underscored the “significant challenges faced by large manufacturing companies” trying to leave Russia.
As part of the deal agreed by BAT, the employment terms of its Russian and Belarusian workers will be comparable to their existing terms for a minimum of two years following the completion of the sale.
