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17 Jul, 2023 11:06

Danone, Carlsberg probe nationalization of assets in Russia

Shares of the food and beer manufacturing giants have been placed under the control of Russian authorities
Danone, Carlsberg probe nationalization of assets in Russia

French dairy products maker Danone and Danish beer giant Carlsberg Group have launched inquiries into the nationalization of their assets in Russia, according to statements on the companies’ websites.

Under a presidential decree published on Sunday, Russia has “temporarily” nationalized all foreign shares of Danone Russia, controlled by French parent company Produits Laitiers Frais Est Europe, and Baltika Breweries, controlled by Carlsberg Group, handing them over to the Russian Federal Property Management Agency. The decision covered over 99% of shares within Baltika Breweries’ registered capital and more than 83 million Danone Russia shares.

In its statement, Danone said it was aware of the decision of the Russian authorities and is now “investigating the situation.” The company noted that it was ready 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.”

Carlsberg Group, in turn, said it had not received any official information from the Russian government regarding the presidential decree, or the consequences for its holdings in the country.

The Carlsberg Group has been operating in accordance with local rules and regulations in Russia and finds this development unexpected. The Group will assess the legal and operational consequences of this development and take all necessary actions in response,” it stated.

Both foreign firms announced plans to divest from Russia last year. In February, reports were that Danone had chosen around 20 potential buyers for its assets and was negotiating the sale. Carlsberg Group last month reached a deal to sell its business in the country and has been awaiting “regulatory approvals and fulfillment of certain conditions in a number of jurisdictions” to finalize the sale.

Following the presidential decree, the prospects for this sales process are now highly uncertain,” the company said.

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