Moscow has seized control of the Russian subsidiaries of French yogurt maker Danone and Danish brewer Carlsberg, highlighting risks facing foreign firms that continue to do business in the country.
In a decree signed by Russian President Vladimir Putin Sunday, foreign-owned stakes in Danone’s Russia business, and Carlsberg’s stake in local brewer Baltika were put under the “temporary management” of Russia’s federal property agency.
The decision follows a decree Putin signed in April that allows the government to place foreign assets in the country under its temporary control if Russian assets abroad are seized or threatened.
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.
But a number of businesses, including Heineken (HEINY), Nestlé, Unilever (UL) and Mondelez (MDLZ), have for various reasons kept a presence in the country. Companies still in the process of leaving Russia may now feel a fresh sense of urgency to do so.
Carlsberg (CABGY) said in a statement Sunday that the development was “unexpected” and that the prospects for the sale of Baltika Breweries were now “highly uncertain.” The Danish company had agreed a deal late last month to sell the business, subject to regulatory approvals.
Baltika is one of the largest consumer goods companies in Russia and employs 8,400 people, according to Carlsberg’s website.
Danone (DANOY) is also in the process of selling its Russian business. It said previously that the deal could result in a €1 billion ($1.1 billion) hit to the value of the asset. The company said in statement Sunday that it was “investigating the situation” and did not expect it to impact its earlier guidance on this year’s earnings.
“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,” it added.
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July 17, 2023 at 04:56PM
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Russia seizes control of Danone, Carlsberg assets - CNN
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