Moscow agrees to sell Carlsberg’s Russian assets for $322mn

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Danish brewer Carlsberg is selling its Russian stake to a local company in a $322mn deal, according to a government document seen by the Financial Times, after President Vladimir Putin signed a decree to curb government controls.

Russia took control of Carlsberg’s Baltika Breweries in July 2023 and put it under “temporary administration”, leaving the company without control over a business that made up 10 percent of its global revenue. In October of that year, Carlsberg said it had withdrawn from the business and the accused the Russian government “stole” the Baltic States.

The Kremlin has imposed tough restrictions on Western companies seeking to exit the Russian market following the all-out invasion of Ukraine, often refusing to accept foreign sales unless they are offered deep discounts.

A government document shows that Baltika will be sold to VG Invest for Rbs34bn ($322mn), and the deal is expected to close in the coming days. It comes after Mr Putin lifted the role of “interim manager” from the Russian company on Monday.

Carlsberg said the deal would take a management buyout approach. VG Invest is owned by two long-time Baltika employees who hold positions in the group. Company records show that VG Invest was founded in August and is managed by Baltika’s vice president Egor Guselnikov.

In a statement on Tuesday, Carlsberg said it would receive cash as part of the deal, but did not specify how much. As part of the agreement, the brewer will also manage the Baltika Breweries divisions of Carlsberg Azerbaijan and Carlsberg Kazakhstan.

Carlsberg CEO Jacob Aarup-Andersen said: “With today’s announcement, we will resolve a number of lawsuits and IP issues related to Baltika Breweries. Considering the current situation, we believe this is the best outcome for our employees, shareholders and the business going forward.” .”

Alexandra Prokopenko, a fellow at the Carnegie Russia Eurasia Center in Berlin, said: “You can be happy that Carlsberg will not leave empty-handed, as it could have been.”

“But it’s clear that the companies that left the Russian market at the beginning of the war won, because they managed to do it without such huge losses,” he added.

The brewer’s assets were initially placed in government hands after the company announced it was close to a deal to sell its subsidiary to Arnest, a Russian pharmaceutical group. who bought it Unilever’s Russian property earlier this year.