Danish beer and beverages major Carlsberg’s (OTC:CABGY) (DE:CBGA) (GB:0AI4) four subsidiaries have been sued by Russia’s Baltika Breweries for over $900 million.
Baltika sued Carlsberg for damages after Carlsberg’s unit in Kazakhstan filed an appeal with a Russian court following a licensing dispute. This legal action occurred because Carlsberg was prohibited from selling the Baltika beer brand in certain international markets by its former Russian partner.
Asset Takeover
Baltika is the largest brewer in Russia. Last year, the country took over Carlsberg’s stake in Baltika, placing it under temporary management. In the aftermath of the takeover, Carlsberg has vowed to resort to all possible avenues to protect its assets and operations in the country.
Bitter Licensing Dispute
Amidst the asset takeover involving Baltika and Carlsberg, a bitter licensing dispute has further complicated their relationship. Last year, Carlsberg terminated Baltika’s licenses, however, a Russian court allowed Baltika to continue to use Carlsberg brands.
On the other hand, Carlsberg is banned from selling Baltika-branded beer in some international markets. Carlsberg’s subsidiary in Kazakhstan is appealing the ban in a Russian court.
What Is the Stock Price Forecast for Carlsberg?
Despite these challenges, Carlsberg’s share price has rallied by nearly 11.6% so far this year. Overall, the Street has a Strong Buy consensus rating on the stock alongside an average CABGY price target of $151.05.
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