PARIS (dpa-AFX) - French tire maker Michelin Cie Des Estb (MGDDY.PK, MGDDF.PK) announced Friday that it has signed an agreement to sell its activities in Russia to Power International Tires LLC.
The company's deal with the Russian tire distributor Power International is for the purchase of Michelin's two local companies, Michelin Russia Tyre Manufacturing Co. LLC and Camso CIS LLC.
Following the start of the conflict in the Ukraine, Michelin had suspended its industrial activities in Russia on March 15, 2022. The company has been present in the country since 1997.
Michelin said the latest deal, approved by the competent local authorities, will allow for saving 250 jobs, mainly based in Davydovo.
The option to pass the activity on to local management was not possible due to major difficulties preventing these activities from being rendered autonomous, it said.
All costs relating to the cessation of activities in Russia have been accrued for in 2022.
Michelin will, however, recognize in May 2023 an expense estimated at a few tens of millions of euros corresponding to currency translation differences.
The expense will be recognized in Operating income, and will have no effect on the Group's 2023 guidance.
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