CABHF - Moscow takes control of Danone Russia Carlsberg's Baltika

2023-07-17 04:58:28 ET

Vladimir Putin signed a decree on Sunday stating that the Russian government would temporarily take control of French yoghurt maker Danone's ( OTCQX:DANOY ) Russian unit and Baltika, a local brewer owned by Carlsberg ( OTCPK:CABGY ).

The decree placed the foreign-owned shares of Danone ( OTCQX:DANOY ) Russia and Baltika Breweries under the control of Russian property agency Rosimushchestvo.

Danone ( OTCQX:DANOY ) said it is investigating the situation and "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 firm said the development has no impact on its full-year guidance. Danone ( OTCQX:DANOY ) had been eyeing a sale of its Russian business, which could lead to a write-off of up to €1B , and it said the process is "progressing according to the expected schedule."

Carlsberg ( OTCPK:CABGY ) said it did not receive any official information from Russian authorities regarding Baltika. "The group will assess the legal and operational consequences of this development and take all necessary actions in response."

The company had decided to exit its business in Russia, and said it already inked a deal for the sale on June 23. "Following the presidential decree, the prospects for this sales process are now highly uncertain," said Carlsberg ( OTCPK:CABGY ).

Kremlin has been threatening to seize more Western assets in the wake of its invasion of Ukraine, in response to what it called "aggressive actions of unfriendly countries." In April 2022, Moscow took over the Russian units of two energy companies: Germany's Uniper ( OTCPK:UNPRF ) and Finland's Fortum ( OTCPK:FOJCF ).

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