Carlsberg IO_06200

Source: Carlsberg

Carlsberg has signed an agreement to sell its Russian business Baltika for an undisclosed sum.

The Danish brewer, which first unveiled plans to sell Baltika in March 2022, has not disclosed who the buyer is or any financial details on the sale “to ensure that the approval processes go as smoothly as possible”.

The separation of the Russian business – the country’s biggest brewer – from the rest of the Carlsberg Group had been “very complicated”, it said. About 150 work streams across business functions and investments of more than DKK150m (£17.2k) in brewery equipment and IT infrastructure in markets outside Russia had to be disentangled.

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.

Additionally, the sale was subject to several customary conditions, including “regulatory approval and fulfilment of certain conditions in a number of jurisdictions”.

Consequently, the timing of the final completion of the transaction was “uncertain”, said Carlsberg, adding that the sales agreement would not affect the 2023 earnings expectations.

“The signing of an agreement to sell the Russian business is a very important milestone in the highly complex separation and selling process,” said Carlsberg CEO Cees ’t Hart.

“While it has been an extensive process, it has been important for us to reach the best possible solution for all stakeholders, including our more than 8,000 employees in Russia.

“We now look forward to receiving the necessary regulatory approvals.”

It comes after Baltika’s total sales revenue for the first quarter of 2022 across of 2022 all channels was up 4% to €2.2m (£1.8m) compared with the same period last year, as reported by the FT.

The first-quarter gross profit was €1.2m (£983.0k), representing a 35% increase compared with the same period last year.