The IKEA Group has received permission to acquire 18,000 hectares of forest in Estonia from the Swedish-owned Södra Forest Estonia.

According to a report by Estonian business outlet Äripäev, on Friday, the Estonian Competition Authority approved a deal whereby Ingka Investments, which is part of the IKEA Group, will acquire Södra's forests in the Baltic states for €720 million. The vast majority – 135,000 hectares – is in Latvia.

Latvia's competition authority received notification of the merger just a few weeks ago and is now awaiting until December 12 to receive opinions from other market participants in order to make a decision regarding the transaction.

Tauno Kusma, forestland country manager at Ingka Investments Estonia, previously told Äripäev that the company is committed to creating greater local added value in the Baltic countries.

"Our goal is to increase the proportion of wood processed in the region in order to strengthen the Baltic forestry value chain," Kusma said.

In January, ERR reported that one of Estonia's largest forest managers – the Swedish-owned Södra Forest Estonia – haddecided to sell nearly 153,000 hectares of land it owns in Estonia and Latvia.

Södra owns approximately 153,000 hectares of land in Estonia and Latvia, most of which is located in Latvia. In Estonia, the company manages 18,000 hectares of land, 90 percent of which is forest land.

Priit Luts of the Estonian State Fores Management Center (RMK) told ERR that since the ownership of only around 1 percent of the total managed forest land in Estonia will be changing, the potential impact on the market as a whole will be limited.

Source: news.err.ee