09 December 2022

Carlsberg postpones its exit from Russia by several months

Denmark | When Carlsberg put its Russian business up for sale in March this year, following Russia’s invasion of Ukraine, it said it would leave the country by the end of 2022.

In an interview with Finans, a Danish newspaper, at the end of October, Carlsberg's CEO Cees 't Hart said he now expects to have the sales process completed by mid-2023.

“It is important that our sales process shall be completed as quickly as possible, but it must also be done in a way that we can justify it to our employees and investors. Therefore, it is possible that the sales process will be extended by a few months. It is a more difficult sales process than we had anticipated,” he was quoted as saying.

Carlsberg hopes to return to Russia at a later stage

Carlsberg’s CEO also admitted that he is keen on putting a buy-back clause into the contract, which would give Carlsberg the opportunity to repurchase the Russian assets at a later stage.

“It’s the dream scenario if there comes an era when we can come back again,” Mr Hart said.

There are many models when it comes to finding a buyer for Baltika and its eight breweries in Russia, which had a turnover of DKK 6.5 billion (USD 910 million) in 2021.

But any type of sale depends on what the Russian authorities are willing to agree to.

Plenty of interest in Baltika

By the end of October, Carlsberg had not reached the next step in the sales process, where it could narrow down the possible buyers. It was prepared to let on that there has been a great deal of interest in its Russian assets, whose value Carlsberg wrote down by DKK 10 billion (USD 1.4 billion) in April. But Carlsberg must be cautious not to stir concerns that Russian firms or institutions will pick up Baltika for a bargain.

Despite war in Ukraine, Baltika saw an increase in operating profit in the first six months of 2022, reaching DKK 944 million (USD 132 million) after tax in Russia.

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