Oct. 16, 2009 - Stora Enso and Arauco announced that they have completed the 50:50 joint acquisition of the majority of Grupo ENCE's operations in Uruguay.

The sale price of the deal is US $344 million (EUR 253 million), including $33 million of assumed debt.

According to Stora Enso, deal includes approximately 130,000 hectares of owned land and plantations, 6,000 hectares of leased lands, and other operations owned by Grupo ENCE in the central and western areas of Uruguay.

The transaction was completed ahead of the originally announced timeframe of end-2009. “I'm very proud that our team in seamless co-operation with Arauco has been able to finalize this project ahead of the original schedule,” said Jouko Karvinen, CEO of Stora Enso. “That is a promising start and will give us a solid platform to go forward with our joint venture and plans in Uruguay.

“Cost-competitive plantation-based pulp is an essential part of Stora Enso's strategy and in one step, this transaction has secured the strategic raw material supply for a world class pulp mill in Uruguay that we are planning jointly with Arauco," Karvinen said.

Stora Enso said that with the 50:50 joint venture established, it will combine its existing assets in Uruguay with Arauco's, and integrate the assets acquired from Grupo ENCE into the joint venture. The deal will result in the JV having a total land base of approximately 250,000 hectares, nearly half of which is planted with hardwood and softwood.

Stora Enso and Arauco noted that they have not made any investment decision concerning the construction of a pulp mill in Uruguay.

SOURCE: Stora Enso