Metsä Group announces Itochu Corporation’s strategic acquisition of 24.9% stake in Metsä Fibre

Apr 13, 2012. /Lesprom Network/. Metsä Group’s parent company Metsäliitto Cooperative, M-real Corporation and Itochu Corporation have agreed on a transaction in which Itochu will acquire a 24.9% strategic stake in Metsä Fibre Corporation against cash consideration of Euro 472 million, which corresponds to an enterprise value of Euro 2,040 million for Metsä Fibre, as the company said in a press release received by Lesprom Network. At the completion of the transaction, Metsäliitto shall exercise the call option on the Metsä Fibre shares owned by UPM-Kymmene Corporation. The call option price for UPM’s 11.0 per cent shareholding in Metsä Fibre is Euro 150 million as was announced by Metsä Group and UPM on 30 June 2011. As a result of the transactions, Metsäliitto’s ownership in Metsä Fibre will decrease to 50.2%(currently 56.8), M-real’s ownership to 24.9% (currently 32.2), and Itochu will own 24.9% of the total share capital of Metsä Fibre. At the same time, the parties will enter into a commercial arrangement whereby Itochu’s sales agent position in selling Metsä Fibre’s long fibre pulp in Asia and Metsä Fibre’s sales agent position in selling Itochu’s short fibre pulp in Europe will be renewed. The pulp sales included in the arrangement on the part of Metsä Fibre in Asia and on the part of Itochu in Europe amount to 500,000 tons and 150,000 tons per annum respectively. "Metsä Group and Itochu have been in commercial relationship for decades and the companies have had close marketing and sales co-operation since 2004. The new arrangement is an excellent opportunity for Metsä Group to create more value and stability through co-operation with a strong commercial partner in the growing Asian market and at the same time strengthen our position as one of the leading pulp market operators globally. Both parties can pursue significant synergies in sales and marketing of each other’s products and the co-operation shall be enhanced even further in the coming years. In addition, the deal sets the right value for our pulp asset. This transaction is also one of the biggest foreign investments in Finland during the past decade,” says Kari Jordan, President and CEO of Metsä Group. The transaction is subject to the approvals by the German competition authorities. The transaction is expected to be closed during the 2Q 2012. Itochu is one of the largest trading companies in Japan with approximately 130 bases in different industries in close to 70 countries. Metsä Group produces high-quality products mainly from renewable Nordic wood. The Group’s core businesses areas are tissue and cooking papers, board and paper, pulp, wood products as well as wood supply.