MOSCOW, July 27 (Reuters) – Elevator maker Otis Worldwide Corp ( OTIS.N ) said on Wednesday it had agreed to sell its Otis Russia business to Russia-based investment company Ice Development.
“After carefully considering the global impacts and consequences of the ongoing crisis and humanitarian tragedy across Eastern Europe, including supply chain disruptions and increased regulations, we have determined that Otis’ ownership of our business in Russia is no longer sustainable “, Otis said in a statement. .
Many companies have chosen to leave Russia or announced plans to do so since Moscow sent tens of thousands of troops into Ukraine on February 24.
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Otis stopped investing in and taking new equipment orders in Russia in March and said the sale would provide more security for local peers, customers and Otis shareholders.
“The deal, subject to customary closing conditions, is expected to close immediately,” Otis said. “Following the transfer of ownership, Ice Development expects to resume full production at the Otis St Petersburg manufacturing facility under a new brand name.”
This facility can produce up to 7,000 elevators a year, the Russian industry and trade ministry said, adding that Otis has the widest service network in Russia.
The ministry said holding company S8 Capital had completed the acquisition. He said the difference between S8 Capital and Ice Development was technical. S8 Capital said Ice Development was a company in its portfolio.
Industry and Trade Minister Denis Manturov said the agreement was important for the industry as a whole and that production equipment, technology, expertise and jobs remained intact as a result of the long negotiations.
“In addition, the terms of the agreement guarantee the continuous supply of necessary spare parts,” Manturov said.
Otis, which reported second-quarter results on Wednesday, said its Russia business had been excluded from the company’s 2022 outlook.
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Reporting by Reuters; Editing by Jan Harvey and Louise Heavens
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