Russian Authorities Decline Agreement Allowing Anheuser-Busch InBev, Owner of Budweiser, to Leave the Country

August 8, 2024 TruthUSA

Russian regulatory authorities have rejected a proposed transaction between Anheuser-Busch InBev (AB InBev) and beverage company Anadolu Efes to transfer AB InBev’s non-controlling stake in its Russian joint venture, AB InBev Efes BV, to the Turkish brewer.

This decision marks a hurdle in AB InBev’s strategy to withdraw from the Russian market following the country’s invasion of Ukraine. However, as with many companies attempting to divest from Russia, the deal was contingent on obtaining the necessary regulatory and governmental approvals.

AB InBev, the world’s largest brewer by volume, initially announced in April 2022 its intention to sell its interest in the joint venture to Anadolu Efes, according to press releases by both companies.

Despite initiating the legal process in December 2023, the companies announced on Aug. 7 that approval was not obtained from the Russian government, prompting a review of the decision by both parties, as mentioned in the press releases.

The joint venture between AB InBev and Anadolu Efes, established in 2018, operates extensively in Russia and Ukraine, with 11 breweries in Russia and three in Ukraine, according to Reuters.

Despite the setback, Anadolu Efes management will continue to oversee the operations of the joint-venture’s business in Russia, according to the companies.

In 2022’s announcement about the company’s decision to withdraw from Russia, Ab InBev noted the company was working to actively support its employees, their families, and humanitarian efforts in Ukraine.

The company said it had provided counseling, housing, and financial aid to displaced employees and their families and is collaborating with nongovernmental organizations to assist.

AB InBev also launched Chernigivske, a popular Ukrainian beer brand, in several countries, including the United Kingdom, Germany, Belgium, France, and others, with plans to expand to more markets.

All profits from Chernigivske sales will fund humanitarian relief efforts, with AB InBev committing at least $5 million to this cause, the company said at the time, noting it is “wishing for peace.”

The company’s decision follows a pattern of Western companies encountering difficulties in exiting the Russian market.

A notable example includes the Danish brewer Carlsberg, whose Russian unit was seized after it announced a sale agreement with an undisclosed buyer. Carlsberg’s CEO described the incident as the business being “stolen.”

In anticipation of exiting Russia, AB InBev had already suspended sales of its flagship brand Budweiser in the country, renounced all financial benefits from the joint venture, and reported a $1.1 billion non-cash impairment related to its non-controlling stake.

Anadolu Efes stated in the release that further updates will be provided as the situation develops.

AB InBev and Anadolu Efes’s announcement confirming the news followed a report from a Russian paper earlier this week which said the deal had been rejected, citing unnamed sources.

Reuters contributed to this report.

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