Russia-based private equity firm Insight Investment Group, headquartered in Moscow, has acquired the Russian leasing arm of Deere & Company, Reuters is reporting. Insight Investment Group confirmed the acquisition of the Russia-based John Deere Financial LLC, a subsidiary of the U.S. company, but did not disclose the price, Reuters reports.
The deal had obtained approval from a Russian government commission on the control of foreign investment. Russia has tightened rules on asset sales by investors from "unfriendly" countries -- those that have imposed sanctions against Moscow over its actions in Ukraine, Reuters reports.
Due to the conflict between Russia and Ukraine, and resulting U.S. and international sanctions against Russia, John Deere last March suspended shipments of machines to Russia and Belarus. In January of this year, Deere reached an agreement to sell its financial services business in Russia (registered in Russia as a leasing company). The completion of the transaction is expected in the second quarter of 2023. Deere does not expect a significant gain or loss from the sale.
Deere offered a statement to DTN/Progressive Farmer about the sale: "Due to the business challenges, Deere significantly reduced its presence in Russia, including the sale of its financial services business in the second quarter of FY 2023. Our U.S. senior management continues to closely monitor all risks to John Deere operations in the region. John Deere acknowledged changes to our business in Russia in our 10-K and 10-Q filings this year."
In the first quarter of 2022, net sales from the Deere's Russian operations represented 2% of Deere's consolidated net sales, Deere reports in its regular 10-Q filing to the Securities and Exchange Commission for the quarter ending Jan. 29, 2023.
"Sales in the region were impacted as the company suspended shipments of machines and service parts to Russia beginning in February 2022," Deere stated in the filing. As of Jan. 29, 2023, and Oct. 30, 2022, Deere's net exposure in Russia and Ukraine was approximately $229 million and $266 million, respectively.
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