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bne August 2023 Companies & Markets I 25
bne:Deal
Danone and Carlsberg assets handed to Putin’s cronies
Wojciech Kosc in Warsaw
The “temporary external management” of the Russian assets of dairy major Danone and brewer Carlsberg has been handed over to a nephew of Chechen warlord Ramzan Kadyrov and Vladimir Putin's ally from '90s
St Petersburg, The Bell and the Financial Times reported. As followed by bne IntelliNews, Russia last week has de-facto
nationalised two major players in the brewery and dairy markets.
To remind, a special government commission approves any foreign asset sale (at a minimum discount of 50%) and the government is mulling at least two additional “exit taxes”
for companies pulling out of Russia and their new local beneficiaries. Most recently, a presidential decree was signed that paved the way for the nationalisation of foreign assets, already applied to Finnish and German energy majors Fortum and Uniper prior to Carlsberg and Danone.
But with Carlsberg and Danone Kremlin did even not bother to veil the nationalisation with economic reasoning or diplomatic lingo, instead unabashedly putting Putin's close allies in charge.
Yakub Zakriev, the nephew of Ramzan Kadyrov and the Chechen Minister of Agriculture, has been appointed the CEO of Danone Russia, the country’s second-largest dairy producer, in what The Bell dubbed the first “blatant expropriation in the interests of structures chosen by the Kremlin”.
In turn, Baltika, the local subsidiary of Danish Carlsberg, will now be helmed by its former president Taimuraz Bolloyev, a good friend and business partner of Putin’s allies “stoligarchs” Yuri Kovalchuk and Arkady Rotenberg.
Alarmingly, the mainstream Russian business media largely ignored the takeover of Danone by the Kadyrov clan, with RBC business portal, Forbes Russia, Vedomosti and Kommersant dailies only running a brief note or not running the news at all.
Kadyrov reportedly has developed an interest in Western food assets, according to two people who advise on corporate exits from Russia that spoke to the Financial Times. “Why food?
The confiscated Russian assets of dairy major Danone (plant pictured) and brewer Carlsberg will handed over to Putin loyalists. / bne IntelliNews
Because it has stable sales volumes and profit margins,” one of them said.
The Bell sources also claim that "Chechen interests" were behind the de-facto nationalisation of Danone Russia, while the Financial Times claims that both Danone and Carlsberg exit deals were "torpedoed" personally by Agriculture Minister and veteran security hawk Dmitry Patrushev.
“The minister wants to place his own people in there to take control of the business,” a person close to the Danone bidding contest told the Financial Times. The paper said that “Vladimir Putin ordered the seizure of Danone and Carlsberg’s Russian operations after businessmen close to the Kremlin expressed an interest in the assets,” citing people close to the decision.
Bolloyev is the actual founder of Baltika, who became director of the new Leningrad brewery in 1991 and ran it until 2004. Under Bolloyev, already in 1993 the brewery was privatised by foreign investors, and Vladimir Putin, back then the deputy mayor of St. Petersburg, supervised the deal.
After leaving Baltika, Bolloyev founded the clothing company BTK Group, which in 2021 became the sole supplier of clothing for the Russian army. From 2009 to 2011 Bolloyev headed the state-owned company Olympstroy, which was created to build facilities for the Sochi Olympics, according to The Bell.
The Bell also reminds that Bolloyev is a long-time acquaintance of Vladimir Putin and people in his inner circle. Together with Putin and Rotenberg, he is a member of the management of the Yavara-Neva judo club in St Petersburg, where Putin's childhood coach Anatoly Rakhlin worked. Bolloyev also has a joint business with Yuri Kovalchuk – he owns a 10% stake in Gelendzhik airport, with another 40% held by Kovalchuk's sanctioned Rossiya Bank.
The Kovalchuk brothers had previously signalled their interest in Baltika, according to two people familiar with the matter cited by the Financial Times. “It’s a new redistribution of wealth” to Putin’s circle, said an unnamed Russian oligarch who has known the president for decades.
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