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News

Moscow govt commission blocks Sanoma sale of Russian publisher

Russian officials have denied permission for Helsinki-based media group Sanoma to divest its 50-percent stake in the Russian publisher Fashion Press. Sanoma says it's disappointed by the decision, but has other interested buyers lined up.

Russia’s Government Commission for Monitoring Foreign Investments has denied Sanoma permission to proceed with the proposed sale of its stake in Fashion Press, publisher of popular magazine Russian-language titles such as Cosmopolitan and Esquire.

Last December Sanoma announced that it was planning to sell off its shares in the company to the US mass media concern Hearst Communications, which currently also owns 50 percent of Fashion press.

Sanoma said at the time that the sale was part of a strategy rolled out in 2013 "to redesign consumer media operations and assess future options."

Sanoma chief executive Harri-Pekka Kaukonen said that the company was disappointed with the commission’s decision, but noted that it had other possible buyers lined up.

Sanoma previously shed its shareholding in Delovoi Standard, publisher of Russia’s leading financial daily Vedemosti as well as its shares in the Russian titles published by United Press.

Russian lawmakers cap foreign media ownership

Last September Russian lawmakers passed new legislation capping foreign ownership of Russian media at 20 percent. The new law means that foreign media companies will have to sell off all or part of their holdings in Russian ventures by 2017.

A Sanoma source told Yle News that Sanoma had already decided to exit the Russian media scene in 2013 as part of strategy. The company was also aware of the new Russian legislation that came into force last October, but had agreed the sale to Hearst, who was responsible for negotiating the deal with the Russian authorities.

The new restriction is likely to complicate Sanoma's efforts to find a suitable buyer for its Fashion Press holdings. However the source reiterated that the company is actively looking for alternatives and is in discussions with other potential buyers.

Sources Yle