Baltika Breweries takes majority share in Russian breweries

05/07/06 Baltika Breweries has announced it has become majority shareholder of Pikra, Vena and Yarpivo Breweries. Thus the legal merger of Baltika with Pikra, Vena and Yarpivo is progressing according to plan. Baltika Breweries, the leading brewer in Russia and Eastern Europe, announced in March that its shareholders have voted in favour of the proposed merger of Baltika with brewing companies Pikra, Vena and Yarpivo. When completed, the merger will reinforce Baltika’s position as Russia’s number one brewer, and double the number of its breweries from 5 to 10.

The deal still requires the formal go-ahead from shareholders meetings in the three breweries, although the companies are already working on merging their operations. Anton Artemyev, Baltika's president, said: "The group is now working with full speed to integrate all operations, sales, distribution and administration." The company said it would acquire 92.76% in St Petersburg-based Vena, 91.9% in Krasnoyarsk's Pikra and 87.19% in Yarpivo in Yaroslavl. The four breweries together have a combined annual production capacity of 37 million hectolitres of beer, compared with Baltika's 24 million hectolitres. The deal raises from 35% to 40% Baltika's share of the booming Russian beer market, where consumers have rapidly switched from traditional vodka.

Baltika is the largest beer producer in Russia and Eastern Europe. Baltika operates five breweries located in St. Petersburg, Rostovon-Don, Tula, Samara and Khabarovsk, with an aggregate production capacity of 24.0 million hectolitres per annum. In 2005, Baltika produced 22.4 million hectolitres of beer. Key Baltika brands, including Baltika, Arsenalnoye and Medovoye, licensed Foster’s and Carlsberg and a number of regional brands such as DV, Samara and Don, are sold across Russia and 38 other countries around the world. Pikra is the largest beer producer in Eastern Siberia. Pikra operates one brewery in Krasnoyarsk with production capacity of 1.5 million hectolitres per annum. In 2005, the company produced 1.1 million hectolitres of beer. Key brands include Kupecheskoye and Legenda, which are sold primarily in its home market of Siberia, however Pikra also has a notable presence in the Far Eastern region of Russia. Vena is one of the leading breweries in the North-West and Urals regions. Vena operates two breweries, one in St. Petersburg and the other in Chelyabinsk, with an aggregate production capacity of 5.5 million hectolitres per annum. In 2005, Vena produced 4 million hectolitres of beer. Key brands include Nevskoye, Uralsky Master and licensed Tuborg.