Russian President Vladimir Putin has signed an order granting temporary management control over the Russian subsidiaries of yoghurt maker Danone and beer company Carlsberg to the state. This move comes after Moscow introduced rules allowing the seizure of assets from “unfriendly” countries. The companies had been in the process of selling their Russian operations when the order was issued. Shares of Danone Russia and Carlsberg-owned Baltika Breweries are now under the control of the Russian property agency Rosimushchestvo.
Danone and Carlsberg React to the Order
Danone, based in France, which began the process of selling its Russian business last October, stated that it is currently investigating the situation. The company is prepared to take necessary measures to protect its rights as a shareholder of Danone Russia and ensure business continuity. Carlsberg has not received any official information from Russian authorities regarding the consequences of the presidential decree on Baltika Breweries. The Danish brewer has completed the separation of the Russian unit from the rest of the company and had signed an agreement to sell Baltika Breweries, but the prospects of this sales process are now uncertain due to the recent order.
Background: Russia’s Move to Control Foreign Assets
In response to what Russia deemed as “unfriendly” actions by the US and other countries, President Putin signed an order in April allowing the temporary control of foreign assets. This order has led to the state taking control of the Russian units of energy companies Uniper (Germany) and Fortum (Finland). Danone’s Russian operation is the largest dairy company in the country, employing approximately 8,000 people, and the sale of the business is expected to result in a €1 billion ($1.1 billion; £860 million) loss for Danone. Carlsberg subsidiary Baltika is known for producing popular beer brands in Russia and employs 8,400 individuals across eight plants.
SOURCE: Ref Image from yahoo
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