Carlsberg, the world’s third largest brewer, said it has disputed the valuation of its partner Khetan Group to sell its entire 33% stake in Carlsberg South Asia Pte Ltd (CSAPL) for $744 million.
Khetan Group had given a formal notice to sell its entire 33% stake in CSAPL, the holding company for the Danish brewer’s businesses in India and Nepal at $744 million put option valuation.
“The Carlsberg Group has disputed the put option valuation and the two parties have agreed to refer the issue to arbitration. We cannot comment any further on the timing of the outcome,” Ulrica Fearn, chief financial officer at Carlsberg, told investors during its earnings call.
AdvtOver the past few years, Carlsberg and its joint venture partner Khetan Group were engaged in a boardroom battle amid concerns from its auditor over financial irregularities, including incorrect payments, embezzlement and kickbacks from customers.
Carlsberg has had serious disagreements pertaining to the shareholders’ agreement between Carlsberg and its partner CSAPL Holdings Pte Ltd (CSAPLH) in relation to CSAPL. Carlsberg owns two-thirds and CSAPLH the rest in the holding firm.
In February this year, it had said the transaction could potentially be completed in 2023, subject to the clarification of any disputes raised by the shareholders and timelines for any regulatory approvals.
In India, Carlsberg is the third largest brewer after United Spirits and Ab InBev and controls about 18% of the overall beer market. However, its strong beer portfolio, mainly Tuborg, accounts for a significant chunk of its sales.
The company said after acquiring the stake, it could review the Indian business and bring a host of global brands.