© Reuters. FILE PHOTO: A bar worker carries a tray of Carlsberg beer in Copenhagen, Denmark, July 30, 2022. REUTERS/Andrew Kelly
COPENHAGEN (Reuters) -Danish brewer Carlsberg (OTC:) said on Friday it had signed an agreement to sell its Russian business but did not name the buyer or the agreed price for the transaction, which is subject to an extensive regulatory review by Moscow.
Carlsberg, the Western brewer most exposed to Russia, said last year it expected a writedown of about 9.9 billion Danish crowns ($1.45 billion) from a sale of the business, which came as a direct result of the invasion of Ukraine.
The sales agreement will not impact Carlsberg’s 2023 earnings expectations, the company said in a statement.
“The signing of an agreement to sell the Russian business is a very important milestone in the highly complex separation and selling process,” Carlsberg CEO Cees ‘t Hart said in a statement.
“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,” he added.
Carlsberg said in March this year that it expected to announce a sale of the Russian business by June and has also said it was seeking an option to buy back the Russian business in the future.
A Carlsberg spokesperson declined to elaborate on the identity of the buyer, citing the Russian authorities’ ongoing approval process of the company’s divestment.
“It is uncertain whether they will get an approval at all, and if they do, it is hard to know when, because the Russian authorities are difficult to predict,” Sydbank analyst Mikkel Emil Jensen told Reuters.
Jensen said Carlsberg would reveal the sales price if they changed their guidance now, which is why the company will wait until it has won full approval from Russian authorities before making any guidance changes.
“They need a full approval, before they potentially change their guidance,” he said, adding that he doesn’t expect Carlsberg to make a capital gain from the sale.
The brewer in 2021 generated 10% of its revenue in Russia, before excluding the country from its Central and Eastern Europe market in 2022.
Western companies remaining in Russia have faced a tricky exit from the country, as new regulations have become difficult to navigate.
Shares in Carlsberg traded 1.1% higher at 1152 GMT, outperforming a 0.4% drop in Copenhagen’s benchmark index.
($1 = 6.8492 Danish crowns)