Russia ramps up its economic war with the West as it seizes local operations of 2 corporate giants
- Russia escalated its economic war with the West by seizing local operations of Carlsberg and Danone.
- They marked the second seizures of Western assets since the Kremlin unveiled a decree in April.
Russia escalated its economic war with the West by seizing the local assets of the Danish brewer Carlsberg and the French food company Danone, two multinationals that had been in the process of exiting the country.
Their Russian operations are now under the temporary control of the government, according to a decree signed by Russian President Vladimir Putin on Sunday.
It marked the second such seizure of Western assets after a decree in April cleared the way for the takeover of utilities owned by Germany's Uniper and Finland's Fortum.
Carlsberg and Danone had both been looking to exit Russia by transferring ownership of their Russian-based operations. At the time both firms were seized, Carlsberg had already found a potential buyer, and said last month that the deal was awaiting approval from the Russian government.
"The Carlsberg Group has been operating in accordance with local rules and regulations in Russia and finds this development unexpected," the firm said in a statement on Sunday. "The Group will assess the legal and operational consequences of this development and take all necessary actions in response."
Meanwhile, Danone said it was "currently investigating the situation," and would take measures to "protect its rights as shareholder of Danone Russia, and the continuity of the operations of the business."
To slow the exodus of Western firms out of Russia, the Kremlin previously mandated a steep discount for any firms trying to sell their local operations as well as an exit tax.
But the recent seizures of Western assets signal a continued escalation in Russia's economic war with the West, which imposed punishing sanctions on Moscow in 2022 for its war on Ukraine. Russia has also cut off key oil and gas flows to weaponize its energy supplies.
At the moment, there are around 400 major multinationals that are still actively doing business in Russia, according to a study from the Yale School of Management. Meanwhile, 523 of the major firms in the study have permanently withdrawn from Russia, while 503 firms have temporarily suspended operations.