Ingka Investments' record-breaking acquisition of 153,000 hectares from Sweden's Sodra cooperative made IKEA's franchise parent the largest private forest owner in Latvia - a deal three years in the making, and traceable directly to Russia's invasion of Ukraine.
The deal was so large it took three separate regulatory bodies to approve it. On January 30, 2026, Ingka Investments - the investment arm of the world's largest IKEA retailer - completed its single biggest acquisition in the company's history: EUR 720 million for 153,066 hectares of forest and land straddling Latvia and Estonia, purchased from Swedish forest cooperative Sodra. With that, IKEA's franchise parent became the largest private forest owner in Latvia - controlling roughly 245,000 hectares of Latvian forest, more than any individual or company in the country's history. The transaction was not just a real estate deal. It was the culmination of a supply chain restructuring set in motion on February 24, 2022, the day Russia invaded Ukraine.
Before the invasion, Russia and Belarus together supplied roughly 11 percent of all wood going into IKEA products globally - Russia ranking fifth, Belarus sixth among the company's suppliers. In 2019 alone, IKEA consumed 1.9 million cubic metres of Russian wood, double what it had used five years earlier. Belarus contributed another substantial volume from some of Europe's most productive boreal forests.
The war ended all of that almost overnight. Inter IKEA Group halted all imports and exports in and out of Russia and Belarus within days of the invasion. EU sanctions formalized the ban: by April 2022, the European Union had imposed restrictions on Russian wood imports; Belarus timber was sanctioned even earlier, in March 2022. The Forest Stewardship Council suspended all chain-of-custody certificates from both countries. Russian and Belarusian wood became untouchable, legally and reputationally.
For IKEA, which processes approximately 14.7 million cubic metres of wood annually for products alone - making it the world's third-largest timber consumer, responsible for roughly 1 percent of global lumber demand - the supply hole was immediate. Ulf Johansson, Global Wood Supply and Forestry Manager at Inter IKEA, described navigating what he called "a very hot wood market" to replace the lost volumes. Sweden, Poland, Germany, and above all the Baltic states emerged as the primary replacement sources. IKEA began sourcing more heavily from Latvia, Estonia, and Lithuania - countries already familiar to the company's sourcing teams, but now pressed into far greater strategic importance.
The acquisition did not come from nowhere. Its origins trace to a deal made seven years earlier, in November 2018, when Sodra - Sweden's largest forest owners' association, representing more than 50,000 family forest owners - bought 111,100 hectares of Latvian land from Bergvik Skog for EUR 324 million. At the time, Baltic forestland was considered a solid international diversification play. Sodra had also built terminals in Estonia for pulpwood export back to Sweden, exporting more than 166,000 cubic metres of pulpwood annually.
By early 2025, Sodra had changed course. Its mission, as Peter Karlsson, a business manager at Sodra Skog, stated plainly, was to manage its members' forests in southern Sweden - not to own forests abroad. The Baltic holdings had been profitable, but they were no longer strategically central. Sodra announced the sale process in January 2025. Latvijas valsts mezi, the Latvian state forest company, was widely expected to participate in the bidding. Latvia's Agriculture Minister Armands Krauze had publicly argued the state should seize the chance to reclaim a nationally significant resource. The state company could not secure the financing. No special fund materialized. The government declined to authorize a competing bid. Ingka Investments moved in.
The deal announced in October 2025 covered all of Sodra's Baltic holdings: 135,232 hectares in Latvia (approximately 85 percent forested, representing about 115,000 hectares of productive woodland) and 17,742 hectares in Estonia (approximately 89 percent forested, or about 15,800 hectares of forest). At EUR 720 million - financed entirely from Ingka Investments' own funds, with no debt raised - it became the largest private forest transaction in Baltic history. Niks Sauva, Country Manager of Ingka Investments Latvia, noted the company had spent considerable time assessing the quality of Sodra's holdings before committing. "Our main conclusion and motivation for evaluating this transaction was that these forests are of good quality and managed with a long-term vision," Sauva said.
The transaction triggered a pointed national debate in Latvia that has not fully quieted. Commentators and politicians pointed out the obvious: Latvia had just allowed a Dutch-registered investment vehicle - Ingka Investments is incorporated in the Netherlands - to take control of approximately 7 percent of the country's total private forest area. An opinion piece published in the Baltic News Network put the case starkly: forests represented not just an economic asset but a matter of national security, providing territorial control, carbon sequestration, energy reserves, and biological protection. Latvia's government, the piece argued, had chosen to invoke climate language in speeches while failing to act when a concrete opportunity to reassert ownership arose.
Forest land covering more than 53 percent of Latvia's territory - one of the highest ratios in Europe - is increasingly concentrated in foreign hands. Nordic countries like Sweden, Finland, and Norway have policies to protect or repurchase forest land. Latvia does not. The government's position was essentially that the transaction was a market process.
Ingka Investments, for its part, pointed to a different kind of national contribution: jobs for Latvian forestry contractors, regional wood processing partnerships, and a stated commitment to increase the share of wood processed within the Baltic region rather than exported as raw logs. Prior to the Sodra deal, Ingka's existing Latvian operations had already employed 40 workers directly and created additional work through contractors, planting more than 2.5 million seedlings in a single year. After the acquisition, more than one-third of Ingka Investments' entire global forest portfolio sits in Latvia alone.
Peter van der Poel, Managing Director of Ingka Investments, framed the investment in deliberately long-term terms: a foundation not for quarterly earnings but for generations of furniture production. The company's ownership structure provides unusual freedom for this kind of thinking. Ingka Group is owned by the Stichting INGKA Foundation, a Dutch charitable entity, which means profits are reinvested into the business rather than distributed to shareholders. Eighty-five percent of Ingka Group's net profit goes back into operations; 15 percent supports IKEA Foundation's charitable activities. There are no private shareholders demanding short-term returns.
This structure allowed Ingka Investments to acquire the Sodra forests using entirely its own accumulated capital - EUR 720 million without a single external loan. It also explains how the company can speak of forest management in 100-year frameworks while conventional listed companies cannot. Already before the Sodra deal, Ingka Investments was managing 331,500 hectares of forestland across seven countries, planting 14 million seedlings annually, and maintaining 22 percent of its forests under conservation-focused management that prioritizes environmental objectives over timber yield.
The Sodra acquisition pushes Ingka's global forest footprint to well over 480,000 hectares. In Latvia alone, the company's 245,000 hectares represent a forest management operation with no private peer in the country. Separately, Inter IKEA Group - the franchisee owner and brand licensor, a distinct corporate entity from Ingka Group - also moved to acquire an additional 24,000 hectares in Latvia and Lithuania through a deal with CapMan Natural Capital in December 2025. Taken together, the entities operating under the IKEA brand now control more than 355,000 hectares of forest globally, with both groups accelerating Baltic acquisitions simultaneously.
What the Baltic buying spree makes visible is a structural transformation in how the world's largest furniture supply chain thinks about raw material risk. Before 2022, IKEA's wood sourcing model depended heavily on Eastern European and Russian timber markets - affordable, accessible, and certified under FSC standards that, however imperfect, provided legal cover. The war dissolved that model in weeks.
The shift to owned forestland in the Baltics is not just a procurement change - it is a form of supply chain sovereignty. By owning the trees in the ground, Ingka Investments removes a layer of price risk, logistical dependency, and geopolitical exposure that purchasing from third-party suppliers cannot eliminate. Latvia and Estonia, as EU and NATO members, carry substantially lower sovereign risk than Russia or Belarus ever did. The timber is FSC-certified and FSC remains operative in EU states. The geography is stable, the legal framework is reliable, and the forests - well-managed under Sodra's stewardship for years - are productive.
Sauva captured the operational ambition clearly: increase regional wood processing, strengthen the Baltic forestry value chain, and move away from raw log exports. This means working with Latvian and Estonian sawmills and panel manufacturers rather than shipping logs to Sweden or elsewhere for processing. The economic multiplier, if realized, flows into local communities - skilled forestry jobs, processing employment, contractor networks - rather than out.
The Ukraine war did not create IKEA's interest in forest ownership. The company had been acquiring forestland in Latvia, Lithuania, Romania, and the United States for years before 2022. But the war accelerated and concentrated that strategy. What might have been a gradual diversification became an urgent restructuring. The Baltics emerged as the logical center of gravity: geographically close to IKEA's manufacturing heartland in Poland and Scandinavia, politically stable within the EU, ecologically well-stocked with the pine, birch, and spruce species central to flat-pack furniture production.
The EUR 720 million deal is, in the end, a price placed on supply chain certainty - and on the long-term bet that in a world where resource access can be severed by a single geopolitical shock, owning the forest beats buying from it.