Carlsberg completes divestment following state control and geopolitical tensions.
Danish brewing giant Carlsberg announced on Tuesday that it has reached an agreement to sell its shares in its Russian subsidiary, Baltika Breweries. The move comes shortly after Russian President Vladimir Putin signed a decree ending state management of the company, which had been under government control since mid-2023.
Carlsberg, like many Western companies, initially declared its exit from Russia in March 2022 in response to Moscow’s invasion of Ukraine. At the time, the brewer employed approximately 8,400 people in the country. However, in July 2023, the Russian government placed Baltika Breweries under state management, a move that Carlsberg’s CEO Jacob Aarup-Andersen later described as the business being “stolen.”
Details of the Agreement
In its statement, Carlsberg disclosed that the sale involves transferring its shares in Baltika Breweries to new ownership for an undisclosed cash amount. Additionally, the Danish brewer will regain Baltika’s shareholdings in Carlsberg Azerbaijan and Carlsberg Kazakhstan as part of the agreement.
The new controlling entity for Baltika Breweries will be a company jointly owned by two longstanding Baltika employees who currently hold senior leadership positions. The transaction is expected to conclude within the next few days.
A Challenging Exit
Carlsberg’s CEO, Jacob Aarup-Andersen, commented on the complex nature of the exit:
“Since the announcement of our intention to leave Russia in 2022, we have exhausted all options to find a way to achieve a full exit from Russia while protecting our employees, our assets, and the value of the Carlsberg business.”
The sale also resolves various lawsuits and intellectual property disputes, which Aarup-Andersen acknowledged were critical hurdles during the divestment process.
“Considering the circumstances, we believe it is the best achievable outcome for our employees, shareholders, and the continued business,” he added.
Background and Implications
Carlsberg initially entered the Russian market through its acquisition of Baltika Breweries, which had long been a leading beer producer in the region. However, following Russia’s invasion of Ukraine, many Western businesses faced operational and ethical challenges, prompting widespread divestments.
The reinstatement of private control over Baltika and Carlsberg’s subsequent sale mark the end of a difficult chapter for the Danish brewer, as geopolitical tensions and state interventions complicated its exit strategy.
This sale reflects the ongoing adjustments global businesses must make to navigate the complexities of operating in politically sensitive environments.
