Carlsberg expects a $1.4B hot from sale of Russian business

The Western brewer most exposed to the Russian market, Carlsberg, expects its decision to sell its enterprise there to result in a writedown of about DKK 9.5 billion ($1.39 billion).

The firm, which operates eight breweries and has over 8,400 employees in Russia, announced late last month that it would sell its complete business in the nation, joining an exodus of Western firms since Russia’s invasion of Ukraine.

The Danish multinational brewery group, which owns Russia’s most prominent beer brand Baltika, has more exposure to the country’s market than any other international brewer and earns 9 percent of its total revenue in the eastern European country.

According to Carlsberg, the writedown did not consider any external offers for the business and was subject to a very high degree of doubt and volatility. The firm added that the sale could take up to 12 months.

Additionally, Carlsberg reported a currency loss adjustment to its Russian business worth DKK 4 billion triggered by the sanction-led depreciation of the Russian rouble.

Last year, Carlsberg generated 10 percent of its revenue and 6 percent of its operating profit in Russia, where it took complete control of the Baltika group of breweries in 2008.

Carlsberg’s Dutch rival, Heineken, has also said it will exit operations in Russia, and last month the firm said it expected to book-related charges of about 400 million euros ($437 million).