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Carlsberg divests shares in Russian subsidiary
Carlsberg Group has reached an agreement to sell its shares in Baltika Breweries more than a year after the Russian state seized control of the subsidiary.
Russia’s invasion of Ukraine in early 2022 sparked a wave of foreign divestment, with numerous drinks companies pulling out of the sanction-stricken country.
At the time of the invasion, Carlsberg defended continuing operations in Russia, referencing “a moral obligation” to the 8,400 employees at Baltika Breweries, which it had owned since 2000. However, the company was quick to announce that it would not be making any further investment in Russia and the suspension of advertising its Carlsberg and Baltika-branded products there.
The Russian state took control of Baltika in July 2023, placing it under the management of government property agency Rosimushchestvo.
Aarup-Andersen accused the Kremlin of having “stolen” Carlsberg’s business in the country, telling journalists on a call last year: “We’re not going to enter into a transaction with the Russian government that somehow justifies them taking over our business illegally.”
Russia denied “stealing” Baltika from Carlsberg, with Maria Zakharova, a spokesperson for the country’s foreign ministry, claiming that it was lawful and arguing that Aarup-Andersen’s account of events was “nothing to do with reality”.
Baltika then demanded almost one billion dollars in damages from Carlsberg Group this spring, with claims of “unfriendly and illegal actions” by the brewing giant.
However, getting on for three years after it was first posed that Carlsberg would exit Russia, the ongoing dispute looks to be on the cusp of resolution.
Divestment
The management buy-out, announced today (3 December), sees a company established by two Baltika employees become controlling shareholder of the subsidiary, which reportedly has eight breweries in Russia, including one in St. Petersburg, and produces more than 50 brands. While the two have not been officially named yet, it is speculated that they are Yegor Guselnikov and Alexander Tolmachev.
Carlsberg Group CEO Jacob Aarup-Andersen said in an official statement on the matter: “Since the announcement of our intention to leave Russia in 2022, we have exhausted all options to find a way to achieve a full exit from Russia while protecting our employees, our assets and the value of the Carlsberg business.”
“With today’s [3 December] announcement, we will settle numerous lawsuits and IP rights issues related to Baltika Breweries,” Aarup-Andersen continued. “Considering the circumstances, we believe it is the best achievable outcome for our employees, shareholders and the continued business.”
According to documents seen by Reuters, the deal, which has been approved by both the Russian and Danish states, is worth a reported 30.4 billion rubles (£226.4 million at the time of writing), though Carlsberg Group has not confirmed this. When contacted by db, the company also declined to comment further on the matter as the transaction is still yet to be finalised, though its completion is expected in the next few days.
A press release from Carlsberg Group also revealed that, as part of the deal, Baltika Breweries will transfer all of its shareholdings in Carlsberg Azerbaijan and Carlsberg Kazakhstan to the Carlsberg Group.
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