Mondi to leave Russia after agreeing to sell biggest Russian paper mill

The packaging giant’s share price jumped by nearly 5% on Monday after it unveiled the deal involving Syktyvkar, its last remaining plant in Russia.

Anna Wise
Monday 18 September 2023 05:01 EDT
UK paper and packaging giant Mondi has agreed to sell its largest Russian plant (Igor Golovnov/Alamy/PA)
UK paper and packaging giant Mondi has agreed to sell its largest Russian plant (Igor Golovnov/Alamy/PA)

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UK paper and packaging giant Mondi has agreed to sell its largest Russian plant for around 775 million euros (£668 million) to a Moscow-based property development group.

Mondi’s share price jumped by nearly 5% on Monday morning after it unveiled the deal involving Syktyvkar, its last remaining plant in Russia and the country’s biggest paper producer.

The sale to Sezar Invest, a division of property development firm Sezar Group, will involve six monthly payments in Russian rubles.

Completion of the sale means Mondi expects to leave Russia completely by the end of the year, it said.

The FTSE 100-listed firm has already agreed to sell three of its smaller packaging operations in the country to rival producer Gotek Group.

Mondi had initially planned to sell Syktyvkar to potential buyer Augment Investments Limited for around £940 million amid efforts to divest its Russian assets, but that deal fell through earlier in the year.

Companies have come under pressure to stop doing business in Russia after it launched a full-scale invasion in Ukraine in 2022 under President Vladimir Putin.

Hundreds of large firms have suspended their business in Russia while the war continues, with many others withdrawing completely.

Some companies, like consumer brands giant Unilever, have been criticised for remaining in the country.

The company previously said it had chosen not to leave Russia because it did not want its business to land in the hands of the Russian state, but more recently said it is re-examining its Russian operations.

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