Nokian Tires may be leaving the Russian market soon. Tatneft is getting permission to buy the Finnish company's plant and other assets. The deal was agreed upon in October last year, but now there are some uncertainties and conditions to be sorted out with the authorities. The agreement still needs to be approved by a government commission.
The Russian Antimonopoly Service approved three requests from Tatneft to buy out Nokian Tires, Hakka Invest, and Nokian Tire. The deal was signed in October 2022 with an expected price of about €400 million. The approval process at the FAS started in December.
In its financial report for the fourth quarter, Nokian Tires stated that the deal is waiting for approval from Russian authorities, causing uncertainty about the timing and terms of the transaction.
The FAS pointed out that if the transaction falls under the President's Decree No.618, it can only proceed after getting permission from the government commission for monitoring foreign investment. Documents are expected to be reviewed by the Ministry of Finance.
A lawyer mentioned that FAS approval is not mandatory for submitting documents to the government commission, but it can be useful. He also mentioned that a specific presidential decree may not apply to Nokian's assets, so the approval of the government commission is the remaining step.
Alexander Drozdenko, Head of the Leningrad Region, December 13, 2022:
“We still have difficult issues with our largest operation, Nokian Tires. It is very important for us that the enterprise will operate at its design capacity at least in the second quarter of next year.”
Nokian Tires' Vsevolozhsk plant has been running since 2005, with Russia accounting for 20% of sales and 80% of production in 2021. After the crisis, the company increased production in Finland and the United States and started building a plant in Romania. However, the Russian plant continued to operate until the EU imposed an embargo on tire imports from Russia to Europe and North America in July last year.
The Russian office of Nokian Tires told Kommersant that the plant in Vsevolozhsk will continue to produce tires for cars and SUVs under a different brand after the change of ownership. At the same time, they did not comment on whether we are talking about new trademarks, applications for registration of which were submitted by a Russian legal entity. “Decisions related to changing the brand will be made by the new owner,” they noted.
In December 2022, Nokian Tiers applied for the Torsten and Torsten, Ikon and Ikon Tires brands (see Kommersant dated December 14, 2022). Now the names “Winger” and Winger, “Ragnar” and Ragnar, as well as “Tarantula” and Tarantul have been added to them. Also, the trading company Nokian Tire received the rights to the trademarks Ivanor Service & Market, Ivanor and Ivanor, and Nokian Tiers – to the name Ikonan. The company also registered domains without mentioning Nokian or its brands – this is what other foreign companies do in preparation for the sale.
Now production at the Nokian Tires tire plant in Vsevolozhsk is not carried out due to a planned shutdown required for localization, including information systems, the company told Kommersant.
“Localization processes are progressing according to plan. The plant will be ready to start production in the near future,” they explained.
