In a strategic move to conclude its operations in Russia, Carlsberg finalized the sale of its stake in Baltika Breweries, achieving governmental approval.
- The Danish brewer’s assets in Russia were sold to VG Invest for 34 billion roubles, approximately £252.5 million, marking their official market exit.
- Previously, in 2023, the Russian government had seized control of Baltika shares, affecting Carlsberg’s operations within an ‘unfriendly’ business landscape.
- Carlsberg transferred its shares in Azerbaijan and Kazakhstan back to the Carlsberg Group, as part of the new sales agreement.
- Jacob Aarup-Andersen, CEO of Carlsberg Group, stated the deal addresses multiple legal challenges, securing a favorable outcome for all parties involved.
In a recent strategic decision, Carlsberg has officially exited the Russian market by finalizing the sale of its shares in Baltika Breweries. This move was facilitated by an agreement with local firm VG Invest, which acquired the assets for 34 billion roubles, roughly £252.5 million. The transaction signifies Carlsberg’s full departure from Russian operations, which had been under pressure since the government’s intervention in July 2023.
The backdrop of this exit traces back to a presidential decree in Russia that targeted businesses from ‘unfriendly’ nations, which led to the seizure of Carlsberg’s shares in Baltika. At that time, Carlsberg had not received official notification from Russian authorities concerning the implications of this decree on its business operations. Despite holding a prominent position in the Russian brewing industry with a 30% market share, Carlsberg was compelled to navigate a challenging environment to protect its interests.
As part of the exit strategy, Carlsberg agreed to a transaction where shares of Carlsberg Azerbaijan and Carlsberg Kazakhstan would be transferred back to Carlsberg Group. This ensures a more controlled management of their investments in these regions, independent of Russian governance. The relevant authorities in both Denmark and Russia sanctioned this divestment, paving the way for a cleaner separation of Carlsberg’s business interests.
Jacob Aarup-Andersen, the CEO of Carlsberg Group, articulated that the completion of this sale facilitates the resolution of multiple legal disputes and intellectual property issues related to Baltika Breweries. In his words, ‘Considering the circumstances, we believe it is the best achievable outcome for our employees, shareholders, and the continued business.’ His statement reflects a careful balance of protecting the company’s value and ensuring the welfare of its stakeholders.
This move aligns with a broader trend among international companies withdrawing from Russia in response to geopolitical tensions. Unilever and Danone have also recently divested their operations there, highlighting a significant shift in the business landscape for foreign firms. Carlsberg’s withdrawal marks a potent change in strategy, emphasizing long-term stability over immediate market presence.
Carlsberg’s strategic exit from Russia underscores a decisive shift in global business dynamics amid ongoing geopolitical challenges.
