Moscow seizes Russian subsidiaries of Danone and Carlsberg’s Baltika

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Moscow has taken management of the Russian subsidiaries of Danone and of Carlsberg’s Baltika Breweries, in response to a decree signed into regulation by President Vladimir Putin on Sunday.

The decree mentioned Russia was taking below “short-term administration” the shares of Russian corporations owned by the French meals group and the main Russian beer producer.

The transfer marks the primary time that Russia has seized the subsidiaries of western companies because it took over Finland’s Fortum and Germany’s Uniper in April.

The Kremlin didn’t present additional particulars on Sunday however has beforehand described such strikes as a response to western confiscations of Russian belongings.

An April decree allowed the state to take over the belongings of corporations from international locations deemed unfriendly by the Kremlin to be able to “shield Russian property and nationwide pursuits”.

The Baltika Breweries plant, operated by Carlsberg, in Saint Petersburg, Russia © Andrey Rudakov/Bloomberg

Baltika, primarily based in St Petersburg, produces a number of the most recognisable beer manufacturers in Russia and has 8,400 workers throughout eight vegetation, in response to the Carlsberg web site.

In March final 12 months, quickly after the beginning of Russia’s full-scale invasion of Ukraine, Carlsberg mentioned it had determined “to hunt a full disposal of our enterprise in Russia”.

Late final month, it introduced that it had discovered a purchaser for Baltika and had utilized to the regulatory fee arrange by the Kremlin to deal with western company exits to be able to full the transaction.

The corporate couldn’t instantly be reached for remark.

Firms from “unfriendly” international locations can solely promote their Russian belongings for a most of half their worth and should make a “voluntary contribution” to Russia’s warfare chest of 5-10 per cent of the sale value. Offers require the approval of the federal government — and of Putin himself within the vitality and monetary sectors.

Property seized below the system launched by decree in April are to be positioned below the management of Russia’s federal state asset administration company until Putin decides in any other case, and solely he can reverse the exterior management.

Danone’s Russia enterprise is the nation’s largest dairy firm. It has additionally beforehand introduced plans to promote its Russian belongings, saying the deal might result in a write-off of as much as €1bn. Nevertheless, it had not but introduced that it had discovered a purchaser.

The corporate mentioned it’s “presently investigating the state of affairs” and is “getting ready to take all vital measures to guard its rights as shareholder . . . and the continuity of the operations of the enterprise”.

The Russian authorities’s choice got here a whole shock, in response to an individual with information of the problem, because it had been near finalising the deal. “We wonder if there’s a diplomatic dimension to this, as a consequence of France’s help for Ukraine,” the particular person mentioned.

Dmitry Peskov, a spokesperson for Putin, advised the FT in June that western traders and corporations had been “greater than welcome” in Russia however added that “if an organization doesn’t fulfil its obligations, then, after all, it goes within the class of naughty corporations . . . We are saying goodbye to these corporations. And what we do with their belongings after that’s our enterprise.”

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