Lift-maker Otis agrees to sell Russia business to local investment firm

MOSCOW, July 27 (Reuters) – Lift-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 mounting regulations, we determined that Otis’ ownership of our business in Russia is no longer sustainable,” Otis said in a statement. .

Scores of companies have opted to exit Russia or announced plans to do so since Moscow sent tens of thousands of troops into Ukraine on Feb. 24.

Otis stopped investments and taking new equipment orders in Russia in March, and said the sale would provide more certainty for local colleagues, customers and Otis shareholders.

“The agreement, subject to customary closing conditions, is expected to close imminently,” Otis said. “Upon transfer of ownership, Ice Development expects to resume full production at the Otis St Petersburg manufacturing site, under a new brand name.”

That facility can produce up to 7,000 lifts a year, Russia’s industry and trade ministry said, adding that Otis has the most extensive service network in Russia.

The ministry said holding company S8 Capital had completed the acquisition. It said the distinction 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 deal was important for the industry as a whole and that production equipment, technology, expertise and jobs were remaining intact as a result of lengthy negotiations.

“In addition, the terms of the deal guarantee the continued supply of necessary spare parts,” Manturov said.

Otis, which reported second-quarter results on Wednesday, said its Russia business was excluded from the company’s 2022 outlook.

Reporting by Reuters; Editing by Jan Harvey and Louise Heavens

Our Standards: The Thomson Reuters Trust Principles.