Russia Seizes Local Assets of Danone and Carlsberg
The Russian government has seized control of the Russian subsidiaries of French yogurt maker Danone and Danish brewer Carlsberg.
A number of media were reporting Russian President Vladimir Putin last weekend signed an order putting under the “temporary management” of Russia’s federal property agency the foreign-owned stakes in Danone’s Russia business and Carlsberg’s stake in local brewer Baltika.
“Danone has taken note of the decision of the Russian authorities aiming at placing Danone Russia under temporary external administration of the Russian authorities,” the French company said in a note on its website. “Danone is currently investigating the situation.
“On Oct. 14, 2022, Danone launched a process to transfer the control of its EDP Business in Russia, which was progressing according to the expected schedule. Danone is preparing to take all necessary measures to protect its rights as shareholder of Danone Russia, and the continuity of the operations of the business in the interest of all stakeholders, in particular its employees.”
The Danish brewer wrote: “The Carlsberg Group has not received any official information from the Russian Authorities regarding the presidential decree or the consequences for Baltika Breweries. The Carlsberg Group has been operating in accordance with local rules and regulations in Russia and finds this development unexpected. The Group will assess the legal and operational consequences of this development and take all necessary actions in response.
“On 28 March 2022, the Carlsberg Group announced its decision to seek a full disposal of its business in Russia. Following an extensive process of separating the business from the rest of the Carlsberg Group, an agreement to sell the Russian business had already been signed on 23 June 2023, subject to regulatory approvals and fulfillment of certain conditions in a number of jurisdictions. Following the presidential decree, the prospects for this sales process are now highly uncertain.”
The decision follows a decree Putin signed in April that allows the government to place foreign assets in his country under its temporary control if Russian assets abroad are seized or threatened, CNN noted. At the time, the Russian government took control of utilities owned by German energy company Uniper and Finland’s Fortum Oyj.
The latest move could increase the pressure on Western firms — which already face intense criticism for remaining in Russia — to leave the country. More than 1,000 companies exited Russia in the months following Putin’s full-scale invasion of Ukraine last year, said CNN. But a number of businesses, including Heineken, Nestlé, Unilever and Mondelez, have for various reasons kept a presence there.
