Henkel AG Moves Toward Exit from the Russian Market Amid Sanctions Pressure
German chemical company Henkel AG has initiated the sale of its business in Russia and aims to finalize the transition in the near term. The move comes in response to international sanctions and the goal of transferring its assets to a willing buyer while ensuring compliance across the boards, according to Simon Bajel-Tra, chairman of the company’s Shareholders Committee and Supervisory Board, in an interview with the Swiss newspaper Neue Zürcher Zeitung.
The group, known for manufacturing and supplying detergents and household products in Russia, including Persil, Losk, and Vernel, is now preparing to divest these assets to a third party. The identity of the potential buyer has not been disclosed, as top management assesses several viable options and weighs the implications of a sale against strategic goals and regulatory constraints.
“The sales process has begun. Initially, there was strong interest from multiple parties. We are now narrowing the field to entities that demonstrate serious intent, viability, and the capacity to meet all applicable sanctions,” Bajel-Tra stated. “The process is advancing, and the objective is a swift completion.”
Decision making at Henkel reflected a balance between past performance and present risk. Russia had represented a meaningful market for the company until recently. Annual sales in Russia reached about one billion euros, and the local operation employed roughly 2,500 people across 11 production sites. Bajel-Tra noted that the delay in finalizing the exit decision was driven by a careful assessment of consequences for the company, its employees, and the broader supply chain in light of geopolitical developments and sanctions regimes.
As reported by Kommersant, a letter to suppliers from Sergey Bykovskikh, the managing director of Henkel’s Russian representation, indicated that Henkel would operate in Russia as an independent entity under the name Lab Industries starting January 1, 2023. The transition relied on ensuring the independence of the Russian subsidiary from Henkel’s global business processes as a prerequisite for the transfer of ownership amid the broader withdrawal from the market.
Industry observers note that Henkel’s strategic retreat aligns with a broader pattern among multinational consumer goods groups reevaluating footprint in Russia under intensified sanctions and geopolitical uncertainty. The plan to separate the Russian unit and reframe it as a stand-alone entity underscores the heightened emphasis on regulatory compliance, local governance, and operational resilience during a period of rapid policy shifts. Analysts point out that the sales process is not merely about divesting assets but about preserving value, protecting employees where possible, and maintaining continuity for suppliers and customers during a period of transition. The outcome, whichever party ultimately assumes control, will be shaped by the intersection of sanctions compliance, due diligence, and the ability to integrate Russian operations into a purchaser’s existing networks without disrupting manufacturing and distribution channels.
In recent disclosures, Henkel’s leadership has emphasized that any transformation would be executed with careful consideration of international legal requirements and the potential impact on workers and regional markets. The company’s approach reflects a cautious strategy to unwind a historically important market while seeking to safeguard brand integrity and long-term shareholder value. Stakeholders in both Canada and the United States are watching closely, given the global reach of Henkel’s brands and the implications for global supply chains, competition, and consumer access to products such as Persil, Losk, and Vernel in neighboring markets and abroad. The company’s ongoing evaluation of options continues to prioritize transparency, regulatory alignment, and swift action within the bounds of applicable sanctions and trade controls for all regions involved, including North America.