Shares of foreigners in Baltika Breweries and Danone Russia dairy producer have been placed under temporary management of the Federal State Property Management Agency, Rosimushchestvo, according to Russian President Vladimir Putin’s decree that was published on the official portal of legal documents on Sunday.

In particular, the document extends the list of stakes in charter capitals of Russian legal entities to be transferred under temporary management. The list includes 98.56% in Baltika Breweries’ capital owned by Sweden’s Carlsberg Sverige Aktiebolag, 1.35% owned by Hoppy Union (part of the Carlsberg Group), and 0.09% owned by Carlsberg Deutschland GmbH (Carlsberg’s German subsidiary).

The list of securities to be transferred under temporary management includes 83,292,493,000 ordinary shares in Danone Russia (99.9999% in the capital based on the company’s report for 2022) owned by Produits Laitiers Frais Est Europe and 85,000 Danone Russia shares (0.0001% in the capital) owned by Danone Trade (owned by Danone Russia).

Baltika Breweries said on June 23 that the Denmark-based Carlsberg Group had completed its search for a new investor in its Russian business. The deal is subject to approval by regulatory authorities in Russia, Baltika said.

In October 2022, Danone announced its intention to transfer the effective control of its Essential Dairy and Plant-based (EDP) business in Russia.

The Carlsberg Group has not received any official information from the Russian Authorities regarding the presidential decree or the consequences for Baltika Breweries.

The Carlsberg Group has been operating in accordance with local rules and regulations in Russia and finds this development unexpected. The Group will assess the legal and operational consequences of this development and take all necessary actions in response.

On 28 March 2022, the Carlsberg Group announced its decision to seek a full disposal of its business in Russia. Following an extensive process of separating the business from the rest of the Carlsberg Group, an agreement to sell the Russian business had already been signed on 23 June 2023, subject to regulatory approvals and fulfillment of certain conditions in a number of jurisdictions. Following the presidential decree, the prospects for this sales process are now highly uncertain.

The Group is in the process of obtaining more detailed information and will publish any relevant and verified information, including potential financial implications, as soon as possible.

Danone has taken note of the decision of the Russian authorities aiming at placing Danone Russia under temporary external administration of the Russian authorities1. Danone is currently investigating the situation.

On October 14, 2022, Danone launched a process to transfer the control of its EDP Business in Russia, which was progressing according to the expected schedule.

Danone is preparing to take all necessary measures to protect its rights as shareholder of Danone Russia, and the continuity of the operations of the business in the interest of all stakeholders, in particular its employees.

This decision has no impact on Danone’s financial guidance for 2023/2.