Russia allows sale of Ikea factories to local buyers

Moscow — 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 began waging war on Ukraine last February. Ikea hopes to finalise terms early in 2023.

Sales have been complicated because deals involving companies from countries that imposed sanctions against Russia need approval from a government commission.

Deputy industry & 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 is selling its four production units in Russia, in Tikhvin, Novgorod and Vyatka.

Izvestia said two units have been merged into one, meaning three business units will be included in the deal. The factories will continue to operate and the goods produced will 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.

Chair of the Luzales board Ruslan Semenyuk told RBC Daily that Luzales is acquiring two plants. One condition of the deal is that all employees keep their jobs.

“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 invaded Ukraine. It reopened for a brief online sale last summer.

Reuters