Selloff or Market Correction? Either Way, Here's What to Do NextSee Overvalued Stocks

Russian government approves sale of IKEA factories - deputy minister

Published 02/16/2023, 01:17 AM
Updated 02/16/2023, 11:46 AM
© Reuters. FILE PHOTO: A view shows the logo of IKEA on a closed store in Kotelniki outside Moscow, Russia July 5, 2022. REUTERS/Evgenia Novozhenina

MOSCOW (Reuters) - A Russian government commission has approved the sale of Swedish furniture maker IKEA's factories in Russia to two local buyers, paving the way for a deal to be struck, a government official was quoted as saying on Thursday.

Western companies announced plans to leave Russia after it sent tens of thousands of troops into Ukraine last February. IKEA hopes to finalise terms early this year.

Sales have been complicated as deals involving companies from so-called unfriendly countries - those that imposed sanctions against Russia - need approval from a government commission.

Deputy Industry and Trade Minister Viktor Yevtukhov told the daily Izvestia that kitchen worktop manufacturer Slotex and lumber producer Luzales would purchase the plants.

Brand owner Inter IKEA Group has previously said it was selling its four production units in Russia, in Tikhvin, Novgorod and Vyatka.

Izvestia said two units had been merged into one, meaning three business units would be included in the deal. The factories would continue to operate and the goods produced would be sold by Russian retail outlets.

"The sales process is subject to a mandatory approval process," Inter IKEA said on Thursday. "This process is between the authorities and applying companies."

"We have agreed with potential buyers not to share any details with respect to them and the integrity of the sales process."

Slotex and Luzales did not respond to requests for comment.

Chairman of the Luzales board Ruslan Semenyuk told the RBC daily that Luzales was acquiring two plants and that one condition of the deal was that all employees keep their jobs.

© Reuters. FILE PHOTO: A view shows the logo of IKEA on a closed store in Kotelniki outside Moscow, Russia July 5, 2022. REUTERS/Evgenia Novozhenina

"It is important for us that production facilities work and are developed, and that jobs are preserved," Izvestia quoted Yevtukhov as saying. "The new owners, if necessary, can count on all possible measures of state support."

IKEA, the world's biggest furniture brand, closed its shops in Russia after Moscow launched what it called a "special military operation" in Ukraine. It reopened for a brief online sale last summer.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.