Nokian Tyres sells assets in Russia to Tatneft, expects to receive 400 mln euros
MOSCOW. Oct 31 (Interfax) - Nokian Tyres, which announced its exit from the Russian market this summer, is selling its assets in Russia to Tatneft , the Finnish tire manufacturer said in a statement.
The parties have signed an agreement, and the transaction price is expected to be around 400 million euros, though it could be adjusted depending on a number of factors, including net cash and working capital adjustment, and changes in exchange rates, Nokian.
"The transaction is subject to approval by the relevant regulatory authorities in Russia and other conditions, which creates substantial uncertainties related to the timing, terms and conditions and the closing of the transaction," the company said.
The discontinuation of tire supplies from Russia will have an adverse impact on sales, especially in Central Europe, in next two to three years, Nokian said. In order to secure supply of its products, the company said it has continued to increase capacity at its factories in Finland and in the United States.
Tatneft confirmed the agreement to buy Nokian's Russian assets, including its plant in Vsevolozhsk, Leningrad Region, but did not disclose the details of the deal.
The Federal Antimonopoly Service told Interfax that it had not yet received requests to approve this transaction.
Nokian manufactures and sells tires for cars, offroad vehicles, commercial vehicles, trucks and industrial equipment. The group also includes the Vianor chain of tire centers.
The company opened its plant in Vsevolozhsk in September 2005. It has 14 production lines with capacity to produce 17 million tires per year. In 2021, about 80% of the company's car tires were made in Russia, and the Russia and Asia business division generated about 20% of Nokian Tyres' net sales.
Tatneft had its own tire business, but the oil company sold it this year to Tatneftekhiminvest Holding, the company that coordinates the operations of businesses in Tatarstan's petrochemical industry.