Carlsberg, the third-largest beer producer in the world, announced that it contested the assessment of Khetan Group, its partner, in the sale of its complete 33% interest in Carlsberg South Asia Pte Ltd (CSAPL) for $744 million.
At the put option valuation of $744 million, Khetan Group issued a formal notice to sell its complete 33% share in CSAPL, the holding firm for Carlsberg’s operations in India and Nepal.
“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.
Carlsberg and its partner Khetan Group have been embroiled in a boardroom conflict over the last few years due to concerns raised by their auditor about financial misconduct, such as incorrect payments, embezzlement, and kickbacks from customers.
Carlsberg has encountered significant disputes regarding the shareholders’ agreement with CSAPL Holdings Pte Ltd (CSAPLH), its partner in CSAPL, the holding company. Carlsberg possesses a 66% stake, whereas CSAPLH owns the remaining share in the holding company.
In February of this year, Carlsberg had stated that the transaction could potentially conclude in 2023, provided that any disputes raised by shareholders were resolved and regulatory approvals were obtained within the specified timelines.
Carlsberg is the third-largest beer producer in India, trailing behind United Spirits and Ab InBev, and commands roughly 18% of the total beer market. Nevertheless, a considerable portion of its sales is attributed to its powerful beer lineup, primarily Tuborg.
The firm stated that following the acquisition of the stake, it would evaluate the Indian enterprise and introduce a range of worldwide brands.
