(Bloomberg) -- The shares of Turkish brewer Anadolu Efes were set for their biggest two-day loss since 2001 after Russia’s President Vladimir Putin handed management of the firm’s joint venture with Anheuser-Busch InBev to a local company.
Anadolu Efes fell 10% on Tuesday, extending its slump since Monday’s publication of the decree to 19%. Parent AG Anadolu Grubu Holdings AS’s shares and sister-company Coca-Cola Icecek AS also respectively declined as much as 10% and 7.6% in Istanbul.
AB InBev Efes Russia, the tie-up between the Belgian brewing giant and Anadolu Efes, is now under the temporary management of the Vmeste group of companies, the Russian decree said, without giving any details on Vmeste. The move followed a revised agreement between the partners in October that would’ve made the Turkish brewer the sole owner of the Russian business.
Anadolu Efes “will comprehensively assess this situation and take all necessary steps in response, together with our JV partner,” the group said on Monday.
JPMorgan cut Anadolu Efes’s 2028 dollar bonds to underweight from neutral, saying Russia contributed almost two-thirds of the group’s earnings in the first half of 2024. Anadolu Efes’s credit profile will be “structurally altered for the worse” if Russia decides to make this permanent without adequate compensation for existing shareholders, JPMorgan said.
Previously, Russia has taken international companies’ assets into temporary management after their owners announced deals to sell out when the Kremlin had alternative bidders in mind. As such, Carlsberg A/S’s unit was seized and handed to a Putin ally shortly after the brewer announced plans to sell the business, only to regain control ahead of a deal with an approved buyer.
The Kremlin has previously applied the temporary management plan even when assets were jointly owned by investors from Western countries and jurisdictions that Russia considers friendly.
A year ago, Putin ordered the transfer of rights to manage Russia’s second-busiest airport Pulkovo from foreign shareholders that included Germany’s Fraport AG and the Qatari wealth fund. The airport’s shares were released back to the owner when Fraport agreed to sell its stake to a firm from Oman.
--With assistance from Yuliya Fedorinova.
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