Nokian Tyres plc has signed an agreement to sell its Russian operations to Tatneft PJSC with a final purchase price of 400 million euros.
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.
Nokian Tyres announced in June 2022 that it would initiate a controlled exit from Russia. Upon the closing of the transaction, Nokian Tyres ends all its operations in Russia and the company’s personnel in Russia will transfer to the new owner, as previously reported in MTD.
Nokian Tyres has been operating in Russia since 2005. In 2021, approximately 80% of the company’s passenger car tires were produced in Russia and the business area Russia and Asia represented approximately 20% of Nokian Tyres’ net sales.
The exit from Russia will impact Nokian Tyres’ financial results. As part of the exit impairments of 280.7 million euros related to the Russian assets and a loss of million euros of deferred tax assets in Russia were recorded in the second quarter of 2022.
Discontinued supply of tires from Russia will have an adverse impact on sales especially in Central Europe in next two to three years. In order to secure supply of its products, Nokian Tyres has continued to increase capacity at its factories in Finland and in the United States and is proceeding with the investment in new supply capability in Europe.
