Carlsberg's former assets in Russia removed from temporary govt administration - presidential decree

MOSCOW. Dec 2 (Interfax) - Carlsberg's former assets in Russia have been removed from temporary government administration, with President Vladimir Putin signing the corresponding decree on December 2, 2024.

The document hereby rescinds the provisions of the decree dated 25 April 2023, according to which government administration had been implemented for 98.56% of the stake in the authorized charter capital of Baltika Breweries LLC, as owned by Carlsberg Sverige Aktiebolag; for 1.35% of the stake in the authorized charter capital of Baltika Breweries LLC, as owned by Hoppy Union LLC; and for 0.09% of the stake in the authorized charter capital of Baltika Breweries LLC, as owned by Carlsberg Deutschland GmbH.

As reported, Carlsberg Group, the largest foreign investor in the Russian beer market, announced plans to exit Russia in March 2022. At the end of June 2023, the company said that it had signed an agreement to sell its Russian business, without disclosing the future owner of Baltika or the deal's parameters.

However, the sale did not take place. On July 16, the Russian president signed a decree transferring 100% of Baltika (98.56% owned by Carlsberg's Swedish legal entity, 0.09% by its German legal entity and 1.35% by Hoppy Union LLC) to the management of Rosimushchestvo, the Federal Agency for State Property Management. Carlsberg was forced to acknowledge that the prospects for the sale became extremely uncertain in the wake of the decree. In late October, when commenting on its quarterly results, the company described the situation as "illegal business seizure in Russia" and announced plans to defend its assets, which it had written off in its accounts at nearly $1 billion.

In October 2023, Carlsberg Group terminated its licensing agreements with Baltika for the production and sale of all group products, including international and local brands. In response, Baltika took the matter to court. On October 19, 2023, the court imposed interim measures, prohibiting the Federal Service for Intellectual Property (Rospatent) from registering the termination of trademark usage rights for brands such as Holsten, Kronenbourg, Tuborg and Seth & Riley's Garage. In December 2023, the court of first instance upheld Baltika's lawsuit against Carlsberg, ruling the unilateral termination of the licensing agreements for the production and sale of these brands invalid.

The case was postponed several times.

Baltika is Russia's second-largest brewing company. It operates eight breweries.