The Russian government, under the order of President Vladimir Putin, has taken control of the Russian subsidiaries of Danone, a yoghurt maker, and Carlsberg, a beer company. This action is a result of new rules implemented earlier in the year, allowing Russia to seize assets of companies from “unfriendly” countries. Many companies had halted their operations in Russia following Russia’s invasion of Ukraine. Danone and Carlsberg were in the process of selling their Russian operations when this order was issued.

The order places the shares of Danone Russia and Carlsberg’s Baltika Breweries under the control of the Russian property agency, Rosimushchestvo. Danone, based in France, stated that it is currently investigating the situation and is preparing to take necessary measures to protect its rights as a shareholder and ensure business continuity. Carlsberg stated that it has not received official information from Russian authorities regarding the consequences of the presidential decree on Baltika Breweries. The company had completed the process of separating its Russian unit from the rest of the company and had signed an agreement to sell Baltika Breweries, but the prospects for the sales process are now highly uncertain.

In April, President Putin signed an order granting Russia temporary control over foreign assets in response to actions by the US and other countries that Russia considered “unfriendly and contrary to international law.” As a result, the Russian units of two energy companies, Uniper from Germany and Fortum from Finland, were also brought under state control.

Danone’s Russia operation is the largest dairy company in the country and employs around 8,000 people. The sale of the business was estimated to result in a €1 billion ($1.1 billion; £860 million) loss for Danone. Carlsberg’s subsidiary, Baltika, produces well-known beer brands in Russia and has 8,400 employees across eight plants.

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