Carlsberg to purchase Russian subsidiary Baltika
Danish brewing company Carlsberg plans to buy the remaining 15% stake in its Russian subsidiary Baltika for $1.15bn.
Carlsberg hopes to reverse a drop in market share in Russia, which accounts for 40% of its total beer sales.
The company has invested more than $12bn in Russia since the 1990s. According to the company, the purchase will be 'immediately earnings-enhancing' and provide 'greater operational flexibility'.
The company has reported a 4% drop in full year pre-tax profits to $1.3bn, as a result of decline in Russian sales.
Carlsberg Russia has acquired the stake owned by former joint-venture partner Scottish & Newcastle for $9.1bn deal in 2008. The group expects the delisting of Baltika to happen not later than May 2012.
According to data from Nielsen Holdings, the company's market share in Russia over the full year fell 1.8% points to 37.4%, while the total market contracted about 3%.
Carlsberg chief executive Jørgen Buhl Rasmussen said a high level of promotional activities from competitors had led to this loss of market share, but the steps the company has taken to strengthen the business will begin to bear fruit in 2012.
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