Carlsberg Group signs agreement to sell Baltika brewing company, subject to regulatory approvals

MOSCOW. June 23 (Interfax) - Carlsberg Group has signed an agreement to sell its Russian business as represented by the Baltika brewing company, the group said in a press release posted on its website.

"Following our decision last year to sell our business in Russia, and the subsequent extensive process of separating the business from the rest of the Carlsberg Group, Carlsberg has today signed an agreement to sell its Russian business," Carlsberg Group said.

"The separation of the Russian business from the rest of the Carlsberg Group has been very complicated, including around 150 work streams across business functions and more than DKK 150 million in investments in brewery equipment and IT infrastructure in markets outside Russia," according to the press release.

"The transaction is subject to a comprehensive regulatory approval process in Russia. This includes the filing of applications with the Russian Government Commission to obtain its approvals, which is mandatory under Russian law. In addition, the transaction is subject to several customary conditions, including regulatory approval and fulfillment of certain conditions in a number of jurisdictions," the group said.

"Consequently, the timing of the final completion of the transaction remains uncertain," according to the press release.

Carlsberg has not disclosed with whom the agreement has been signed.

According to a Baltika press release, until the deal is completed, the brewing company plans to continue its operational and commercial activities as usual, as well as maintain its obligations to partners and social guarantees for employees.

Carlsberg announced plans to withdraw from the Russian market in March last year. In addition, the company suspended investments and exports to Russia and stopped advertising on the Russian market, while ending local production of its flagship Carlsberg brand.

The company has owned a stake in Baltika since 2000. In 2008, it became the majority shareholder, and then the sole shareholder, having bought back and then delisted its shares from the stock exchange.

Baltika, the second largest brewing company in Russia, operates eight factories in Russia. The company's revenue in 2022 increased to 100.7 billion rubles from 82.6 billion rubles in 2021, while net profit increased 1.9 times to 9.952 billion rubles. Last year, Baltika produced 197.42 million decaliters of products, which is 4.7% less than in 2021.

As reported, the Dutch brewing concern Heineken also announced plans to exit the Russian market. Another foreign producer, the Belgian brewing concern Anheuser-Busch InBev (AB InBev), has decided to sell its non-controlling stake in the AB InBev Efes joint venture, which combines the assets of AB InBev and Turkish Anadolu Efes in Russia and Ukraine. AB InBev is in talks with Anadolu Efes to buy out the share, it was previously reported.

AB InBev Efes has been the leader of the Russian beer market since 2019.

According to NielsenIQ data provided during Russian Retail Week at the end of May, the results of January-April this year show that the share of licensed beer in Russia decreased to 27.1% from 28.3% a year earlier, while the share of imported beer dropped to 3.7% from 5.1%, respectively.