UPM Offers M-real EUR 500 Million for Botnia Shares
Nov. 9, 2006 - UPM has made an offer to M-real to buy Metsä-Botnia shares representing 15% of Metsä-Botnia.
UPM said its offer is based on M-real's strategic review announced in October that included the possible sale of M-real's stake in Metsä-Botnia.
UPM has offered EUR 500 million for the shares.
If the offer is accepted, UPM said it intends to work with other Botnia stake-holders towards developing Botnia's global presence as a producer of pulp. UPM also sees opportunities to strengthen the competitiveness of Botnia's Finnish pulp production.
UPM currently holds a 47% stake in Botnia, while M-real holds 39% and Metsäliitto Cooperative holds 14%.
Botnia is Europe’s second largest pulp producer with five mills in Finland and production capacity of 2.7 million tonnes a year. About 80 per cent of production is sold to the paper mills of Botnia’s owners, while the other 20 per cent is sold on the market, mainly in Europe.
Botnia is currently involved with a proposed pulp mill project in Uruguay, which would have an annual capacity of 1 million tonnes. However, construction of the mill has come under fire from neighboring Argentia, who claims the mill would create environmental problems.
The two countries share the river on which the plant is being built and signed an environmental treaty in 1975