BillerudKorsnäs to Sell PM 2 at Gavle Mill to Newly Established Company

May 6, 2013 (Press Release) - In order to satisfy one of the conditions set by the EU Commission for approval of the combination between Billerud and Korsnäs, an agreement has been signed with SwedPaper AB ("SwedPaper") concerning divestment of a paper machine (PM2) at the Gävle production unit. Production at PM2 in 2012 accounted for approximately 2% of BillerudKorsnäs’ total combined sales volume.

Under the agreement, PM2 at the Gävle production unit will be sold to SwedPaper. The machine produces kraft and sack paper. The PM2 operation employs approximately 60 people, who will be offered employment with SwedPaper. Other operations at the Gävle production unit will not be affected by the sale and will remain in BillerudKorsnäs’ ownership.

The parties have signed long-term commercial agreements, under which BillerudKorsnäs will inter alia supply input items such as pulp, steam and water to SwedPaper. Pricing for pulp will be in line with the market. Under the conditions of the agreement, BillerudKorsnäs will sell SwedPaper an annual volume of pulp amounting to a maximum of 66 000 tons. Sales of pulp to PM2 will be accounted for in the Packaging Paper Business Area. At BillerudKorsnäs, the operations of PM2 have been accounted for under Other units.

The disposal will not in any way affect the synergy and cost-cutting programme announced earlier for the BillerudKorsnäs Group.

The transaction is conditional upon the approval of the European Commission and from relevant authorities.

SwedPaper AB, is a new started company that has been established with the pupose to acquire PM2. Behind SwedPaper stands four private investors — Mikael Colebring, Peter Ekman, Lars-Ake Brännström och Lars-Eric Boreström (through their separate companies) — all with extensive experience in entrepreneurship, particularly in the paper industry. SwedPaper has reached agreement with Ekman & Co, which means that Ekman & Co will distribute PM2's products.

SOURCE: BillerudKorsnäs