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AB InBev warns of $1bn hit from Russia exit

Belgian brewer Anheuser-Busch InBev is in talks to sell its stake in its Russian and Ukrainian joint venture to its Turkish partner, in a deal that could cause a $1.1bn hit to the world’s largest brewer.

The maker of Budweiser, Stella Artois and Corona is seeking to sell its non-controlling interest in joint venture AB InBev Efes to Anadolu Efes.

However, it will still have an indirect holding in Russia because it owns a 24 per cent stake in Efes, according to S&P Capital IQ, dating from its takeover of rival SABMiller in 2016.

It is the first significant example of a Turkish company stepping in to fill the gap created by an exodus of western brands from Russia, said an analyst at a Turkish investment advisory group.

As part of the deal, AB InBev said on Friday that it had asked for sales of Budweiser to be suspended in Russia. It said it would take a $1.1bn non-cash impairment charge as a result of the deal.

The brewer’s decision to withdraw from Russia comes as multiple western companies have left or reduced their operations in the country in protest against its invasion of Ukraine, or because of sanctions and supply chain disruptions.

Turkey, a Nato member that has forged close relations with Moscow and Kyiv in recent years, has condemned the Russian invasion and has supplied the Ukrainian military with armed drones. But it has also sought to maintain what it calls a “balanced” stance, to avoid damaging its economic, energy and defence ties with Russia.

Turkish officials have said they will not sign up to western sanctions packages against Russia, while some Turkish businesses and executives have said they view the withdrawal of western companies as an opportunity.

The investment advisory analyst said it was too early to say whether the acquisition would be good for Anadolu Efes. “It’s not clear how consumption patterns in the Russian beer market will change, how the competitive environment will change,” they said.

Rating agency Fitch downgraded Anadolu Efes last month, citing a “challenging macroeconomic environment in the company’s two largest markets of Turkey and Russia, as well as in Ukraine”. Efes and AB InBev formed their joint venture in 2018.

Edward Mundy, analyst at Jefferies, said AB InBev’s decision “does not come as a surprise, following the announcements from Carlsberg and Heineken to exit Russia”.

Carlsberg, which owns the Russian brewery Baltika and has proportionally more exposure to the country, at 9 per cent of revenues, than its two larger rivals, has said it plans to sell its Russian operation over the next year.

The Danish brewer said it expected a $1.4bn writedown from the sale, while Heineken has signalled a €400mn writedown from offloading its Russian operation.

The household products maker Reckitt Benckiser is also seeking to sell its Russian business, while other consumer products manufacturers, such as Nestlé, the world’s largest food group, have stripped down their sales there to “essential” products.

AB InBev shares were down 2.9 per cent by mid-afternoon to €55.84, while shares in Anadolu Efes rose almost 1 per cent to TL30.70.

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