Billerud and Korsnäs to Merge
Solna, Sweden 20 Jun 2012 -- Swedish paper and packaging producers Billerud and Korsnäs are combining their businesses to create BillerudKorsnäs. Billerud and Kinnevik, the owner of Korsnäs, entered into an agreement to create new player in the European packaging material market. The combination will be effected by Billerud acquiring all shares in Korsnäs from Kinnevik. Korsnäs’s ownership in Bergvik, and the Kinnevik owned company Latgran will be a part of BillerudKorsnäs.
Billerud will pay the acquisition purchase price for the shares in Korsnäs in the form of shares in Billerud, a cash payment of SEK3,200m (roughly €362m) and assumption of debt amounting to SEK5,650m. Kinnevik will receive 25.1% of shares in Billerud. Closure of the transaction is expected for the fourth quarter 2012.
According to the two companies' 2011 sales figures, the new company, BillerudKorsnäs, will have will have a combined sales volume of 870,000 tpy of cartonboard (liquid packaging board, folding boxboard and cup stock), 570,000 tpy of containerboard and 1.2 million tpy of packaging papers.
The management teams, as well as the Board of Directors in Billerud and Korsnäs respectively, expect that the combination will create a stronger company that will be even better positioned to offer its customers competitive products and solutions and to attract and retain the best staff. Thus, the transaction is estimated to improve the possibilities to generate attractive returns for shareholders in BillerudKorsnäs, the companies stated.
"The packaging market is exhibiting a positive long-term development, mainly due to increased globalisation, increased prosperity and changing consumption patterns," Billerud said in a press release.
Billerud operates gloabally in the virgin fibre-based packaging segment. Production takes place at six sites in Sweden, Finland and the UK with an annual capacity of around 1.7 million tonnes. In 2011, net sales amounted to approximately SEK 11 billion including the acquisition of UPM’s packaging paper operations.
Korsnäs is a supplier of virgin fibre-based packaging materials. Cartonboard is the largest product area, where liquid packaging board is used for the beverage containers, white top kraftliner to the outer layer of corrugated packaging and cartoboard, primarily to pack cosmetics, exclusive drinks, confectionery and frozen food. Production takes place at three sites in Sweden with an annual capacity of 1.13 million t (paper and cartonboard). In 2011, net sales amounted to around SEK 9 billion.
Per Lindberg, currently CEO of Billerud, will become President and CEO of BillerudKorsnäs and Christer Simrén, CEO of Korsnäs, will be appointed Vice President and Chief Operating Officer. Susanne Lithander will serve as CFO in the new company.