Rockwool said Tuesday that Russia had ordered the takeover of the Danish insulation maker’s local subsidiary with its four factories.
“Today, we learned that a Russian presidential decree is approved whereby external management has taken control of Rockwool’s Russian subsidiary and that Rockwool is no longer in control of its assets in the country,” the company said in a statement.
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The company said it was not optimistic of reversing the decision and that it would deconsolidate the subsidiary from its balance sheet and write down the equity value of the assets, which stood at 469 million euros ($546 million) at the end of last year.
Rockwool said the Russian subsidiary reported revenues of 261 million euros last year, with earnings before interest and taxes coming in at 78 million euros.
Hundreds of Western companies left Russia following Moscow’s February 2022 invasion of Ukraine, with many selling at steep discounts or writing-off assets entirely.
Rockwool said in 2022 that it would continue operating in the country, saying it was in the best interest of its 1,200 employees in Russia.
However the company said it voluntarily halted the export of stone wool products from Russia in 2022 despite no sanctions having been enacted.
The Kremlin has made it difficult for foreign companies to make money from the sales of their local operations, and in some cases has moved to take outright control of companies.
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In 2023, Russia seized the Russian subsidiaries of French yoghurt maker Danone and Danish beer company Carlsberg, months after doing the same to Germany energy firm Uniper and Finnish counterpart Fortum.