IKEA's Ingka Investments Receives Approval for 18,000 Hectare Forest Acquisition in Estonia

Estonian Regulators Approve Major Forest Acquisition

The Estonian Competition Authority has granted permission for Ingka Investments, the investment arm of the Ingka Group (the largest IKEA retailer), to acquire 18,000 hectares of land in Estonia from the Swedish-owned Södra Forest Estonia. This approval, reported on December 2, 2025, marks a significant step in a larger transaction valued at €720 million, encompassing forestland across both Estonia and Latvia.

The acquisition is part of Ingka Investments' strategy to secure sustainable timber supplies and enhance the forestry value chain in the Baltic region.

Details of the Baltic Forest Deal

The total agreement, initially announced in October 2025, involves Ingka Investments purchasing approximately 153,000 hectares of land in Latvia and Estonia from Södra, Sweden's largest forest owners' association. Of this total, about 89 percent is forestland. In Estonia specifically, the acquisition covers 18,000 hectares of land, with approximately 90 percent being forestland, amounting to between 15,773 and 17,742 hectares of actual forest.

The deal's overall price tag stands at €720 million, or roughly SEK 8 billion. While the Estonian portion has received regulatory clearance, the transaction is still awaiting approval from Latvia's competition authority.

Strategic Motivations for Both Parties

For Ingka Investments, this acquisition represents its largest forestland purchase to date and aligns with its long-term commitment to responsible forest management and sustainable resource sourcing. Tauno Kusma, forestland country manager at Ingka Investments Estonia, stated that the company's goal is 'to increase the proportion of wood processed in the region in order to strengthen the Baltic forestry value chain.' Peter van der Poel, Managing Director of Ingka Investments, emphasized that the acquisition is part of a 'long-term strategy to invest in forestland and strengthen our commitment to responsible forest management,' aiming to ensure that 'this vital resource remains forests forever.'

The move also reflects IKEA's broader strategy to shift its timber sourcing and production towards Central and Eastern Europe, particularly the Baltic states, following supply disruptions caused by sanctions on Russian and Belarusian timber.

Conversely, Södra's decision to divest its Baltic holdings is a strategic shift to concentrate on its members' forests in southern Sweden, thereby enhancing its profitability and long-term competitiveness. Lotta Lyrå, President and CEO of Södra, noted that the transaction enables them 'to focus more on developing the value of our members' forests.'

Market Impact and Future Outlook

The acquisition's impact on the Estonian market is expected to be limited. Priit Luts of the Estonian State Forest Management Center (RMK) indicated that since the ownership change affects only about 1 percent of the total managed forest land in Estonia, the potential market impact will be minimal.

Ingka Investments plans to continue the responsible forestry practices established by Södra and aims to collaborate with Baltic sawmills and panel manufacturers to process timber regionally, supporting local economies and jobs.