Status: 04/13/2022 5:10 p.m
The Tengelmann Group is giving up the entire Russian business of its DIY store subsidiary Obi. The company is giving away the 27 branches in the country to a Russian investor – apparently also out of concern about impending expropriation.
The family group Tengelmann has ended the Russian business of its DIY chain Obi with a hard cut. The entire Russian subsidiary with its 27 hardware stores and 4,900 employees in the country will be handed over to an investor – without Tengelmann receiving any money for this.
All legal entities in Russia were transferred to an investor without payment of the purchase price, the hardware store chain announced today. The company has apparently forestalled an impending expropriation in the country. The name of the investor was not mentioned. The competent authorities still have to agree to the sale of the markets, it said. The only condition is that the Obi brand may no longer be used in Russia in the future.
Resistance from Russian managers
Tengelmann boss Christian Haub said in an interview with “Manager Magazin” three weeks ago that he was expecting expropriation in Russia – and that the branches there would have to be written off. For “moral reasons,” he said, he could not imagine continuing to do business in Russia and thereby indirectly supporting the regime there financially.
The German leadership had already decided in mid-March to close the Obi hardware stores in Russia. But Russian managers simply reopened them. The German Obi management then separated the tills from the servers. The Russian newspaper “Wedemosti” spoke of a “severe conflict between the Russian Obi leadership and the German majority shareholder”.
French chain Leroy-Merlin sticks to Russia
Numerous Western companies have already given up their business in the country – or cut back sharply – because of Russia’s war of aggression against Ukraine. In the hardware store sector, French competitor Leroy Merlin is holding on to the Russian market, unlike Obi. Closing the markets would open the way for confiscation and put money in Russia’s coffers, said the Mulliez family, which owns 85 percent of Leroy Merlin’s holding company. One cannot punish the Russian collaborators for a war they did not decide.
Leroy Merlin is therefore criticized. There are calls for a boycott of the hardware store chain on social networks. “Leroy Merlin is the first company in the world to fund the bombing of its own businesses and the killing of its own employees,” Ukraine’s Defense Ministry tweeted.