14 Mar 2023 15:41

Govt commission approves Tatneft deal to acquire Nokian Tyres business in Russia

MOSCOW. March 14 (Interfax) - Russia's Government Commission for Monitoring Foreign Investment has approved a deal for Tatneft to acquire a number of legal entities from the Finnish tire manufacturer Nokian Tyres, the foreign company said in a release.

"According to the resolution (...), the allowable transaction price determined by the commission is 23.05 billion rubles. The actual ruble / euro exchange rate set by the Central Bank of Russia on the date of payment will be applied. Based on the Refinitiv base rate (...) on March 13, 2023, the price approved by the Russian government commission will be 286 million euros," the release says.

There are still significant uncertainties related to the transaction and its timing. The final closing of the transaction depends, among other things, on the successful completion of a review for compliance with recent sanctions innovations, Nokian Tyres said in the release.

The Finnish company announced its withdrawal from the Russian market last summer, it was reported. In October, it became known that it would sell its assets in Russia to Tatneft. It was assumed that the price of the transaction would be about 400 million euros.

In February, Russia's Federal Antimonopoly Service approved three applications by Tatneft to acquire 100% stakes in the charter capital of Nokian Tyres LLC, Hakka Invest LLC and Nokian Shina LLC from the Finnish company.

Nokian Tyres manufactures and sells tires for passenger cars and SUVs, commercial, cargo and industrial vehicles. The group also owns the Vianor chain of tire centers.

The Nokian Tyres plant in Vsevolozhsk opened in September 2005. It has 14 production lines with a capacity of 17 million tires per year. In 2021, about 80% of the company's passenger tires were produced in Russia, with the Russia and Asia business unit accounting for about 20% of net sales.