Hardware chain sells branches: Obi warns of expropriation in Russia

Status: 04/13/2022 5:10 p.m.

The Tengelmann group is abandoning all of the Russian activities of its DIY store subsidiary Obi. The company is selling the country’s 27 branches to a Russian investor – apparently also for fear of impending expropriation.

Family group Tengelmann 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 have been transferred to an investor without payment of the purchase price, the hardware chain announced today. The company apparently prevented an impending expropriation in the country. The name of the investor was not mentioned. The relevant authorities have yet to agree to the sale of the markets, he added. The only condition is that the Obi brand can 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 expected an expropriation in Russia – and that branches there should be deregistered. For “moral reasons,” he said, he could not imagine doing business in Russia and thus indirectly supporting the regime there financially.

German leaders had already decided in mid-March to close Obi hardware stores in Russia. But the Russian managers simply reopened them. Obi’s German management then separated the crates from the waiters. The Russian newspaper “Wedemosti” spoke of a “serious conflict between Obi’s Russian management and the German majority shareholder”.

The French chain Leroy-Merlin sticks to Russia

Many Western companies have already given up their activities in the country – or greatly reduced – due to Russia’s war of aggression against Ukraine. In the hardware sector, French competitor Leroy Merlin retains the Russian market, unlike Obi. Closing markets would pave the way for confiscation and put money in Russia’s coffers, said the Mulliez family, which owns 85% of Leroy Merlin’s holding company. You can’t punish the Russian collaborators for a war they didn’t decide on.

Leroy Merlin is therefore criticized. Calls for a boycott of the hardware chain fuse on social networks. “Leroy Merlin is the first company in the world to fund the bombing of its own businesses and the murder of its own employees,” the Ukrainian Defense Ministry tweeted.

Leave a Comment