Russia takes ‘temporary’ control of Danone, Carlsberg assets
RUSSIA seized control of the Russian subsidiaries of France’s Danone and Denmark’s Carlsberg under a decree by President Vladimir Putin aimed at companies from “unfriendly” countries.
According to Sunday’s (Jul 16) decree, shares in Baltika Brewing Company, owned by Carlsberg, and in Danone Russia will be transferred to Russia’s Federal Property Management Agency for “temporary management”.
The decision won’t affect Danone’s 2023 financial guidance and the company is taking steps to safeguard its shareholder rights in Russia, the Paris-based food maker said in a statement. Carlsberg called the decision “unexpected” and indicated it’s assessing legal and operational consequences as well as any financial impact.
Putin signed a decree in April allowing for “temporary” state control over the assets of companies or individuals from “unfriendly” states – which include the US and its allies – in response to similar moves, or the threat of them, by those countries.
Sunday’s move is only the second time the Kremlin has used the decree to seize assets. Previously, Russia took control of utilities owned by Finland’s Fortum and Germany’s Uniper.
Danone, which makes yoghurt and baby food among other food products, planned to sell most of its business in Russia but intended to keep 25 per cent of shares and stay on the board of directors. It expected the sale could result in a write-off of as much as 1 billion euros (S$1.48 billion).
Carlsberg in June found a buyer for Baltika, the Russian unit said at the time. “Following the presidential decree, the prospects for this sales process are now highly uncertain,” Carlsberg said in a statement on Sunday. BLOOMBERG
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