By Alexander Marrow

LONDON (Reuters) -Carlsberg will sell its Russian assets to two longstanding employees of Baltika Breweries, the Danish brewer said on Tuesday, after a government document seen by Reuters showed Moscow had approved the 34-billion-rouble ($320.75 million) deal.

Moscow seized control of Carlsberg’s stake in Baltika, Russia’s leading brewer, in July 2023 and placed it under “temporary management,” prompting Carlsberg Group CEO Jacob Aarup-Andersen to say its business had been stolen. Carlsberg’s assets were removed from temporary management on Monday.

Carlsberg, whose shares fell 1.8% in early afternoon trading, said it would receive a cash consideration, as well as Baltika Breweries’ shareholdings in Carlsberg Azerbaijan and Carlsberg Kazakhstan.

The transaction, already approved by Russian and Danish authorities, was expected to close in the coming days, Carlsberg said. It did not confirm the value of the deal.

Baltika declined to comment and Russia’s finance ministry, which heads the government commission on foreign asset sales, did not immediately respond.

DISCOUNTED SALE

Scores of foreign firms have left Russia since Moscow sent troops into Ukraine in February 2022, with Russia steadily tightening exit requirements.

Carlsberg has faced more uncertainty than most. Within a month of announcing plans to sell to an undisclosed buyer in June 2023, Moscow assumed control of Carlsberg’s business.

Two employees were later detained, accused of illegally transferring intellectual property rights out of Russia as Moscow assumed control. Carlsberg labelled those allegations “fake”.

The proposed sale price implies Carlsberg selling at a significant discount. In a February 2023 report, Carlsberg said its net assets in Russia as of December 2022 were worth 7.52 billion Danish crowns ($1.06 billion).

Russia now demands sharp discounts on any foreign asset sales before giving approval, and takes a portion of the sale price to bolster state coffers, dubbed an “exit tax” by Washington.

The government document seen by Reuters showed that Russia had approved the sale of Carlsberg assets to VG Invest, a company registered in August and managed by Yegor Guselnikov, vice president at Baltika, according to Russian corporate filings.

Carlsberg said the new controlling shareholder of Baltika would be a company owned equally by “two longstanding Baltika employees, currently holding leading positions in the company”. It said the two people, who it did not name, would also take over Baltika’s management duties.

Guselnikov co-owns with Alexander Tolmachev Brewery Development Centre (BDC), which was incorporated in July.

Tolmachev used to work for Heineken in Russia and subsequently for grain trading firm Demetra, according to his LinkedIn profile.

Guselnikov and Tolmachev declined to comment.

BDC owns a number of companies established this year, including New Breweries and Project 650. The latter is run by Alexei Pyatkin, who is also CEO of Carlsberg-owned Hoppy Union.

According to the government document, VG Invest would have to direct 15% of the market value of Baltika Breweries to Russia’s federal budget.

‘BEST ACHIEVABLE OUTCOME’

As part of the deal, Baltika’s stakes in Carlsberg Azerbaijan, Carlsberg Kazakhstan and another Azerbaijan subsidiary would be transferred to Carlsberg in exchange for Hoppy Union, the document showed. Hoppy Union was valued at 2 billion roubles, but no cash would change hands for that part of the transaction, the document showed.

Aarup-Andersen said Carlsberg had exhausted all options in terms of fully exiting Russia while protecting employees, assets and the value of its business.

“With today’s announcement, we will settle numerous lawsuits and IP rights issues related to Baltika Breweries,” he said in a statement. “Considering the circumstances, we believe it is the best achievable outcome for our employees, shareholders and the continued business.”

Carlsberg’s assets were seized at the same time as those of Danone. Moscow forced through a sale, finalised in May, of the French yoghurt maker’s assets to a pro-Kremlin businessman.

Taimuraz Bolloev, who ran Baltika from 1991 to 2004, was appointed president of Baltika during the temporary management period. Carlsberg said the current external management, put in place as Baltika management by the Russian authorities in 2023, would leave their positions.

Russia’s Vedomosti newspaper, citing sources, reported late on Monday that Bolloev was among the investors. Reuters could not immediately verify that.

($1 = 106.0000 roubles)

($1 = 7.1014 Danish crowns)

(Reporting by Alexander Marrow in London, Olga Popova and Anastasia Lyrchikova in Moscow and Gleb Stolyarov in Tbilisi; additional reporting by Stine Jacobsen in Copenhagen; editing by Barbara Lewis)

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