LONDON, UK: British American Tobacco (BAT) has sealed an agreement to divest its operations in Russia and Belarus, the company confirmed on Thursday. This move comes more than 18 months after the large-scale invasion of Ukraine prompted numerous Western firms to withdraw from Russia.

BAT disclosed in a statement that it had formalized a sales agreement with a consortium led by members of its Russian operations’ management team. The company anticipates the transaction to conclude within the next month.

“After completion, BAT will cease to have a presence in Russia or Belarus and will not benefit financially from ongoing sales in these markets,” the company stated.

In February, BAT had reported that its 2022 results were affected by a £612 million ($764 million) charge linked to its Russian and Belarusian businesses, with most of this amount attributed to impairment charges – a significant reduction in asset value.

BAT’s Russian and Belarusian businesses contribute approximately 2.7% of its total revenue.

The company had already indicated its intent to exit the Russian market as early as March the previous year, shortly after the outbreak of the conflict, deeming its ownership of the Russian business unsustainable in the prevailing environment.

However, withdrawing from Russia has proven to be a protracted process for Western companies due to the Kremlin’s stringent regulations and substantial government fees imposed on asset sales.

Last month, Dutch beer maker Heineken announced its exit from Russia, stating it had sold its Russian business for a nominal €1 ($1). Heineken CEO Dolf van den Brink noted that the departure had taken much longer than anticipated and highlighted the formidable challenges faced by large manufacturing companies attempting to exit the Russian market.

As part of BAT’s agreement, the employment conditions for its Russian and Belarusian workers will remain consistent with their existing terms for at least two years following the sale’s completion.