Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Moscow has rejected a deal through which Turkish brewer Anadolu Efes was set to acquire AB InBev’s stake in a $1.3bn Russian joint venture.
Anadolu Efes, which first agreed the deal with the brewer of Budweiser and Stella Artois in December, said on Thursday that it was informed by Russian authorities that “the current structure of the transaction has not been approved”.
The companies said they were “reviewing the decision” and that normal operations would continue under the direction of Anadolu Efes.
Russia’s decision to block the deal comes at a time of heightened concern that the country, which has been hit by the US, EU and others with sanctions over its war in Ukraine, will seize more foreign assets. Moscow last year took control of the Russian subsidiaries of Danone and of Carlsberg’s Baltika Breweries.
The FT reported earlier this year that Danone plans to sell its subsidiary to the nephew of Chechen strongman Ramzan Kadyrov while Carlsberg remains locked in a legal battle with the Russian state.
Nato member Turkey has diverged from its western allies, retaining strong ties with Russia and declining to sign up to sanctions. Turkish President Recep Tayyip Erdoğan met his Russian counterpart Vladimir Putin as recently as last month.
Anadolu Efes’s deal to buy AB InBev’s stake in their Russian joint venture was seen at the time as a sign of how Turkish businesses were still keen to operate in Russia despite pressure from western governments to leave. Russia is an important market for Istanbul-listed Anadolu Efes. Consultancy KPMG assessed the Russian joint venture to be worth $1.1bn-$1.3bn at the time the deal was announced.
The pact would have allowed AB InBev, the Belgian-Brazilian brewer, to exit the country. Anadolu Efes and AB InBev had formed the joint venture in 2018. Russia’s finance ministry did not respond to a request for comment on the decision to block the deal.
Shortly after Russia’s full-scale invasion of Ukraine in early 2022, AB InBev said it was forfeiting “all financial benefit” from the joint venture and recorded a $1.1bn impairment on the business. In the case of a sale, the beer giant would retain an indirect holding in Russia through its 24 per cent stake in Anadolu Efes.
Scores of Western multinationals announced their intention to leave the country or scale back operations in the weeks and months after the invasion. However, those that did not immediately exit have faced mounting obstacles to departing.
Western companies struggled to find buyers to which a sale would not violate western sanctions, or that would be acceptable to the Russian authorities. The Kremlin also imposed a mandatory 50 per cent discount for Russian buyers acquiring company assets from “unfriendly countries”, as well as a 15 per cent minimum “exit tax”.
Additional reporting by Max Seddon and Anastasia Stognei
Read the full article here
