The UK-based Mondi PLC (GB:MNDI) yesterday announced a $826 million exit deal from Russia, pushing its share price over 3%. The company signed an agreement with Moscow-based real estate company Sezar Group to divest its only remaining facility, Mondi Syktyvkar. Mondi Syktyvkar is a leading paper mill in Russia that supplies products to various companies.
This deal came after Mondi withdrew from an agreement to sell this facility in June 2023 due to regulatory issues. However, the company has now confirmed that it has secured the required approvals from Russian regulatory authorities for the deal.
Post-announcement, Mondi’s share price experienced a 4% increase, leading the FTSE 100 index on Monday, driven by the relief of a secured deal after previous delays. Shares also rallied on the possibility of a cash distribution to shareholders, which boosted the overall sentiment.
Mondi PLC is a leading manufacturing company that specializes in the production and distribution of pulp, paper, and flexible plastic packaging items. The company caters to a huge customer base in around 30 countries worldwide.
The Russian Exit
The total deal value of $826 million will be paid in multiple instalments by December 2023, which will mark the completion of the deal and the company’s complete exit from Russia. With this deal, Mondi also joined the big list of Western companies that have exited Russia following their invasion of Ukraine.
Recently, the UK-based tobacco manufacturer British American Tobacco PLC (GB:BATS) also announced its exit from Russia in a month’s time with the sale of its Russian and Belarusian businesses. BAT owns 25% of the cigarette market in Russia, and the exit would impact its financial numbers for the fiscal year 2023.
On the other hand, British FMCG giant Unilever PLC (GB:ULVR) has not yet finalized its departure from Russia and has been facing criticism for this decision.
What is the Price Target for Mondi?
According to TipRanks consensus, MNDI stock has received a Moderate Buy rating based on four Buy and two Hold recommendations. The Mondi share price target is 1,456.6p, which is 5.5% above the current trading level.
