Title: Russia Seizes Western Assets in Escalating Economic War
In a further escalation of its economic war with the West, Russia has seized the local operations of multinational companies Carlsberg and Danone. This marks the second such seizure of Western assets since the Kremlin unveiled a decree in April, seen as a retaliatory action against the Western sanctions imposed on Russia.
Both Carlsberg and Danone had been seeking to exit Russia by transferring ownership of their Russian-based operations. The companies were actively negotiating potential buyers before their assets were seized.
Carlsberg had already found a potential buyer and stated that the deal was pending approval from the Russian government. Meanwhile, Danone is investigating the situation and vows to protect its rights as a shareholder, ensuring the continuity of its business operations in Russia.
The Kremlin’s move to seize Western assets comes after implementing various measures aimed at slowing down the exodus of foreign firms from Russia. These measures include offering discounts for selling local operations and imposing an exit tax.
The recent seizures of Carlsberg and Danone assets symbolize the growing intensity of the economic war between Russia and the West. Russia, which has faced punishing sanctions for its involvement in the conflict with Ukraine, has resorted to weaponizing its energy supplies by cutting off key oil and gas flows.
According to a study conducted by the Yale School of Management, there are still approximately 400 major multinationals actively conducting business in Russia. However, 523 companies have permanently withdrawn, and 503 have temporarily suspended their operations, highlighting the significant impact of the ongoing economic tensions.
As tensions continue to rise, it remains to be seen how this economic war will have lasting implications on global business operations and diplomatic relations. The seizures of Carlsberg and Danone assets serve as a clear message from Russia that it will not back down in the face of Western sanctions, choosing instead to intensify its economic retaliation.
