Putin has seized from Danone and Carlsberg multibillion-dollar assets invested in Russian subsidiaries
Russia was the largest market for both transnational giants until 2014
Russian dictator Putin is nationalizing Russia's largest dairy company, Danone Russia, and the Baltika brewery, owned by Denmark's Carlsberg. This is the second time since Russia's invasion of Ukraine that Russia has taken away billions of dollars in Russian assets from foreigners.
Source. This was reported by The Bell.
On Sunday evening, Putin signed a decree transferring the shares of foreign shareholders of the Baltika brewery and Danone Russia dairy company to the temporary management of the Russian Federation.
"Baltika is Russia's second largest brewing company, 100% owned by the Danish concern Carlsberg.
"Danone is the country's largest dairy producer, 100% owned by the French Danone.
At the same time, Carlsberg announced just three weeks ago that it had found a buyer for its Russian assets. However, it is now impossible to sell the Russian subsidiary to a foreign company without the permission of a special government commission. Carlsberg said in a release that it is waiting for such a permit.
Danone has been selling its Russian assets more slowly. In October 2022, the company announced that it would find new owners for its Russian business, but it did not find investors.
"Transfer to temporary management" de facto means nationalization. This mechanism was introduced at the end of April by a decree issued by Putin himself and was first applied to the largest foreign investors in the Russian electricity sector, Germany's Uniper and Finland's Fortum. The very next day after Putin's decree was published, the management of the Russian subsidiaries of both companies was replaced by people from the orbit of Rosneft CEO Igor Sechin. Fortum announced this week that it is filing a claim for several billion euros in compensation in international arbitration.
This is not the first time that foreigners' assets have been nationalized in Russia. In fact, the nationalization happened a long time ago and to all of them at once when Putin banned companies from selling their Russian assets without permission from the Russian government last fall.
But Danone and Carlsberg occupy a special place in terms of investment in the Russian market. In fact, they were at the heart of the formation of the Russian consumer market in its current form. The history of both companies in Russia is a reminder of the place Russia occupied in the global economy before the war against Ukraine. Russia was the largest market for both multinational giants until 2014.
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