The government commission has approved a deal to sell IKEA factories in Russia. The buyers were two large domestic furniture manufacturers – the Slotex company and the lumber manufacturer Luzales. The capacities left by IKEA will continue to operate in the country, the products of these enterprises will be sold in domestic retail chains. Viktor Evtukhov, Deputy Head of the Ministry of Industry and Trade, told Izvestia about this. He noted that further the Russian and Swedish parties would have to carry out a deal, its amount was not disclosed.
High Level Approval
A government commission has approved a deal to sell three IKEA factories in Russia. It happened on February 15th. The buyers were two large domestic manufacturers — the Slotex company (specializing in kitchen worktops and facades) and the lumber manufacturer Luzales. The capacities left by IKEA will continue to function in the Russian Federation, the products of these enterprises will be sold in domestic retail chains. Viktor Evtukhov, Deputy Head of the Ministry of Industry and Trade, spoke about this, answering a question from Izvestia. He noted that further the Russian and Swedish parties would have to make a deal, its amount and parameters were not disclosed.
— It is important for us that production works and develops, jobs are saved. New owners, if necessary, can count on all possible measures of state support that are in the arsenal of the Ministry of Industry and Trade,” Viktor Yevtukhov emphasized.
The foreign office of IKEA has already said that they hope to close the deal in the first half of 2023. The company indicated that it first needed to go through a government commission and get approval.
Izvestia sent a request to the Swedish office of the company, as well as to Slotex and Luzales.
According to SPARK, the sole owner of Slotex with a 100% share is Svetlana Osipova, the company is based in St. Petersburg. The owner of Luzales from Syktyvkar is Maria Semenyuk. According to information in the media, this is a family business, the founder of the company is Nikolai Semenyuk.
IKEA stopped its development in the country at the beginning of 2022. Like many foreign manufacturers and sellers, the Swedish company faced problems in importing the necessary products. It soon became known that a foreign player was putting up for sale four factories in the Leningrad, Kirov and Novgorod regions.
Two of them were merged into one, so the perimeter of the transaction included three enterprises. The company closed its stores in the Russian Federation, specifying that, if possible, it would return within a few years. Whereas Mega shopping centers, which are part of the same holding with IKEA – Ingka Group, still operate in the country. For almost a year, while IKEA was looking for a buyer for its facilities, factories were predicted by leaders in several industries. For example, the retailer Hoff and the investment company AFK Sistema.
Such semi-state force majeure transactions are now carried out in dollars or euros. In order to make a settlement and withdraw money from the country, you need permission from the Central Bank, Georgy Ostapkovich, director of the Center for Market Research at the National Research University Higher School of Economics, explained to Izvestia. It will be easy to get it – the deal was approved by the Ministry of Industry and Trade. Even if it is held in rubles, the funds are easily converted into foreign currency.
– In this case, we are talking about a contract price, not a market price: factories are geared towards the production of certain furniture, hardly anyone really wants to develop them. Many foreign companies, leaving, closed deals with a nominal fee, and perhaps IKEA will do the same, reserving the right to repurchase within five years, the expert said.
He added that none of the unfriendly states imposed sanctions against IKEA or automakers, the companies themselves decided to leave the country. They did this in order not to lose other sales markets. Therefore, it is only natural that now they are ready to simply leave their sites.
How exactly domestic enterprises will develop IKEA factories is still difficult to say, a source in the industry said. Plants and equipment are focused on certain components. In such a situation, domestic manufacturers must either enter into partnership agreements for the supply of the necessary components from abroad, or simply look after the factories.