March 4. 2024. 6:18

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Russian government approves sale of IKEA factories

A Russian government commission has approved the sale of Swedish furniture maker IKEA’s three 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 (16 February).

Western companies announced plans to leave Russia after it sent tens of thousands of troops into Ukraine last February.

Sales have been complicated by the need for deals involving firms from so-called unfriendly countries – those that imposed sanctions against Russia – to win 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.

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Russia is advancing a new law allowing it to take control of the local businesses of western companies that decide to leave in the wake of Moscow’s invasion of Ukraine, raising the stakes for multinationals trying to exit.

The factories would continue to operate and the goods produced would be sold by Russian retail outlets. The Russian and Swedish companies, Izvestia said, would work out the terms of the sale.

No details were announced. Brand owner Inter IKEA, Slotex and Luzales did not immediately respond to a request for comment.

“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 decided to close its shops in Russia after it launched what it describes as a “special military operation” in Ukraine. Many other Western companies – from energy producers to food and clothing chains – have left Russia.

Ikea suspends Russia, Belarus operations, affecting 15,000 staff

Swedish furniture giant Ikea said Thursday (3 March) it would suspend its activities in Russia and Belarus, affecting nearly 15,000 employees, 17 stores and three production sites, in response to the war in Ukraine.

IKEA, the world’s biggest furniture brand, shut down its Russian stores last March and said it would sell factories, close offices and reduce its 15,000-strong workforce in Russia. It reopened for a brief online fire sale last summer.