MOSCOW, April 1. /TASS/. Russia’s developer Etalon Group will acquire the Russian business of the Finnish construction concern YIT, the company said in a statement on Friday.

"The Board of Directors has reviewed and approved the strategic acquisition of YIT Corporation’s Russian business for a maximum consideration of RUB 4,597 million," the statement said.

Etalon Group together with YIT Corporation have agreed on the sale of YIT Russia, according to the statement. The completion of the transaction is subject to further regulatory approvals.

The press service of the Finnish concern has confirmed that YIT signed an agreement with Etalon Group PLC on sale of its business in Russia. "Due to the Ukrainian crisis, our businesses in Russia were facing unprecedented challenges and it was becoming increasingly difficult to continue operations," President and CEO of YIT Markku Moilanen was quoted as saying. "The sale of the Russian businesses gives us an opportunity to a rapid, controlled and complete exit," he said, adding that the sale is estimated to be closed during April, with the transaction price of approximately 50 million euros.

According to the agreement, Etalon Group will acquire YIT Russia, which focuses on mid-market residential real estate. Its portfolio includes 19 projects in five different Russian regions: Moscow and the Moscow Region, St. Petersburg, the Ekaterinburg Region, Kazan and Tyumen. YIT Russia’s portfolio consists of residential real estate at the design stage or under construction. YIT’s portfolio in Russia has a total unsold net sellable area of 0.6 mln square meters. In addition, the transaction will include exclusive rights to Dispatcher 24 software for managing apartment buildings and residential areas, project design documentation and a library of standard design solutions for cast-in-place construction and buildings made of prefabricated panels, as well as service companies with 2.5 mln sqm under management and a 50% stake in a joint venture with Brusnika, whose assets under management total 2.2 mln sqm.

About the company

YIT Russia started its operations in 1961 with the development of various industrial projects. In 1997, YIT Russia began to focus on residential housing development with the purchase of a St. Petersburg-based construction company. From 2005 to 2016, YIT Russia expanded its operations in five Russian regions. In 2016, YIT Russia spun its service businesses off into a stand-alone business and later invested in the start-up Dispatcher 24.

The integration of YIT’s business in Russia will enable Etalon Group to achieve several important goals, such as increasing the scale of the company’s operations and strengthening its market position, according to Etalon Group CEO Gennadiy Shcherbina. "Thanks to YIT’s solid track record in regional markets, good reputation and experienced teams responsible for construction and sales, we can speed up our regional expansion by accelerating the pace of construction activities on our own projects in Ekaterinburg and Tyumen as well as by adding attractive new projects. The acquisition of YIT Russia will also enable us to enter Kazan, one of the country’s most promising markets, thus expanding our geography of operations to seven regions. It will also increase our supply in our primary markets of Moscow and St. Petersburg," he was quoted as saying.

According to the company, YIT’s revenue from housing construction in Russia amounted to 204 mln euro in 2021, which is 7% of the group’s total revenue last year. Around 1,500 employees of the company are employed in housing construction in Russia. Last November it was reported that YIT was considering sale of its business in Russia. In early March it was reported that YIT suspended investment in housing construction and land plots on Russian soil due to changes in the geopolitical environment after the beginning of the special military operation in Ukraine.

Founded in 1987, Etalon Group focuses on middle class residential real estate in the Moscow and St. Petersburg metropolitan areas. Since its foundation, the company has commissioned 7.9 mln square meters of real estate.