Moscow seized the Russian subsidiaries of Danone and Carlsberg’s Baltika

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Moscow has taken control of the Russian subsidiaries of Danone and Carlsberg’s Baltika breweries, according to a decree signed into law by President Vladimir Putin on Sunday.

The decree states that Russia is placing shares of Russian companies owned by a French food group and a major Russian beer producer under “temporary administration”.

The move is the first time that Russia has seized subsidiaries of Western businesses since taking over Finland’s Fortum and Germany’s Uniper in April.

The Kremlin did not give further details on Sunday but has previously described such moves as a response to the Western seizure of Russian assets.

An April decree allowed the state to take over the assets of companies from countries deemed unfriendly by the Kremlin in order to “protect Russian property and national interests”.

According to the Carlsberg website, Baltika, based in St. Petersburg, produces some of the most recognizable beer brands in Russia and has 8,400 employees at its eight plants.

In March last year, shortly after the start of Russia’s full-scale invasion of Ukraine, Carlsberg said it had “decided to completely dispose of our business in Russia”.

Late last month, it announced it had found a buyer for Baltika and applied to the regulatory commission set up by the Kremlin to handle Western corporate exits to complete the transaction.

The company could not be immediately reached for comment.

Companies from “unfriendly” countries can only sell their Russian assets for a maximum of half the price and must make a “voluntary contribution” of 5-10 percent of the sale price to Russia’s war fund. The deals require approval from the government and Putin himself in the energy and financial sectors.

Assets seized under the system introduced by decree in April are to be placed under the control of Russia’s Federal State Asset Management Agency until Putin decides otherwise, and only he can reverse the external controls.

Danone’s Russia business is the country’s largest dairy company. It has previously announced plans to sell its Russian assets, saying the deal could result in a write-off of up to €1 billion. However, it is yet to announce that it has found a buyer.

The company said it is “currently investigating the situation” and is “preparing to take all necessary measures to protect our rights as a shareholder.” , , and continuity of business operations”.

According to a person with knowledge of the matter, the Russian government’s decision came as a complete surprise, given that it was close to finalizing the deal. “We wonder if there is a diplomatic dimension to this because of France’s support for Ukraine,” the person said.

Putin’s spokesman Dmitry Peskov told the FT in June that Western investors and companies were “very much welcome” in Russia, but added that “if a company doesn’t fulfill its obligations, then, of course, it will goes in the category.” rogue companies. , , We say goodbye to those companies. And what we do with their property after that is our business.