Helsinki, Finland, Feb 1, 2012 – UPM sells its packaging paper production to the Swedish packaging paper company Billerud. The transaction includes two packaging paper machines; one in Pietarsaari and one in Tervasaari, Finland. The enterprise value of the transaction is EUR 130 million. The transaction is subject to regulatory approval. The target is to close the transaction during the second quarter of 2012.
The mills’ real estate and key infrastructure in both locations will stay in UPM’s ownership. As part of the transaction, the parties have agreed on long-term market-based raw-material and services supply agreements on the mill sites. The personnel of the packaging paper business will transfer to Billerud as old employees.
“UPM considers continuing consolidation to be critical to the cost competitiveness of the whole industry. With this transaction UPM and Billerud will have an improved opportunity to develop businesses that are at the centre of each company’s strategy. Billerud is a solid and successful player in the packaging paper business, whereas UPM is increasingly focusing on graphic papers and selected speciality papers. These speciality papers comprise of postal papers which are part of our graphic paper offering and label papers which are synergistic to our Label Materials business,” says Jyrki Ovaska, President of UPM’s Paper Business Group.
“The negotiations with Billerud have proceeded well and we have a shared view on how to make things work. We have every reason to believe that the cooperation within the mill sites will be successful,” says Ovaska.
The production capacity of the sold business is approximately 300,000 tonnes of packaging papers. The paper machine 7 in Tervasaari produces kraft papers and the paper machine 1 in Pietarsaari produces kraft and sack papers.
The turnover of the business involved in the transaction is approximately EUR 220 million and the pro forma EBITDA (excluding overhead and administration expenses) is EUR 18 million (2011A). The number of personnel transferring to Billerud is approximately 185. UPM estimates to report a one-off gain from the transaction in excess of EUR 50 million.
UPM continues pulp production at its modern pulp mill in Pietarsaari, and paper production at Tervasaari’s two label paper machines.
For further information please contact:
Jyrki Ovaska, President, Paper Business Group, UPM, tel: +358 2041 50564
Arto Lampinen, Senior Vice President, Manufacturing, Paper Business Group, UPM, tel: +358 20 41 50609
Pentti Putkinen, General Manager, UPM Tervasaari, tel. +358 204162300
Kenneth Winberg, General Manager, UPM Pietarsaari, tel. + 358 204169632
UPM leads the integration of bio and forest industries into a new, sustainable and innovation-driven future. Our products are made of renewable raw materials and are recyclable. UPM consists of three Business Groups: Energy and pulp, Paper, and Engineered materials. The Group employs around 24,000 people and it has production plants in 16 countries. UPM's annual sales exceed EUR 10 billion. UPM's shares are listed on the Helsinki stock exchange. UPM – The Biofore Company – www.upm.com
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