Deal announcement – UPM EUR 130 million divestment of packaging paper assets

Today on 1 February 2012, UPM-Kymmene Corporation (“UPM”) announced the signing of the sale of packaging paper assets to Swedish Billerud. The divested business comprises two packaging paper machines; Pietarsaari PM 1 and Tervasaari PM 7.

The enterprise value of the transaction is EUR 130 million. UPM estimates to report one-off gain from the transaction in excess of EUR 50 million.

Divestment of packaging paper assets is in line with UPM’s strategy to refocus its paper operations towards graphic papers and selected specialty papers. With this transaction UPM and Billerud will have an improved opportunity to develop businesses that are at the centre of each company’s strategy.

Billerud will finance the transaction from cash at hand and debt from existing credit facilities.

The completion of the transaction is subject to customary closing conditions, including regulatory approvals and target is to close the transaction during second quarter of 2012.

Nordea Corporate Finance has acted as exclusive financial adviser to UPM .

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