Finnish forestry giant UPM-Kymmene and Sappi have signed a non-binding letter of intent to form a joint company for their European graphic paper operations, owned 50/50 and operated as a stand-alone company.
The two parties are contributing operations and assets valued at a total of approximately €1.42 billion, excluding expected synergies.
The joint venture is expected to generate annual synergies of around EUR 100 million through the optimization of assets, product portfolio, logistics, purchasing, and operations.
For UPM, the transaction will result in a cash payment of EUR 613 million from the joint venture, the transfer of pension obligations of EUR 406 million, and a 50% ownership stake. The figures are preliminary and subject to adjustment.
UPM-Kymmene Oyj is one of the world's leading paper producers. Net sales (including intragroup) break down by family of products as follows:
- papers (40.5%): magazine papers (worldwide No. 1 producer), fine and special paper (No. 1 in Europe; coated and glazed fine papers, packaging papers, letter-head paper, envelopes) and newspaper papers (No. 2 in Europe);
- pulp and timber products (30.1%): pulp, sawn timber and plywood;
- processed products (15.1%): adhesive labels, packaging (for the paper, steel and wood industries), silicon papers for the hygiene products, etc.;
- other (14.3%): primarily electricity production from renewable energy.
At the end of 2024, the group had 54 production plants worldwide.
Net sales are distributed geographically as follows: Finland (12.6%), Germany (10.4%), the United Kingdom (5%), France (3.7%), Poland (2.9%), Austria (1.1%), Europe (18.2%), the United States (17.4%), China (16.9%), Uruguay (1%) and other (10.8%).
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