Arctic Paper’s offer to acquire the remaining 80% of Rottneros, announced on Stockholm’s NASDAQ OMX today (7 November), bids to exchange each current Rottneros share for 0.1872 in new Arctic Paper shares.
Alternatively, those owning up to 2,000 shares can opt to receive a cash consideration of SEK 2.30 (22p) per share based on Arctic Paper’s closing price yesterday (6 November).
The acceptance period will run from 22 November to 12 December and, should all Rottneros shareholders opt to take shares in the proposed combined company, they will hold a 34% stake in Arctic Paper.
The combined company will consist of four fine paper mills and two pulp mills, a set-up that Arctic Paper said will make the group less volatile than the current standalone entities through balancing pulp production and consumption.
Tomas Hedström, chief financial officer of Rottneros, said that logistical savings from increased intergroup deliveries and a reduction in administration costs is expected to save the combined company SEK 80m a year.
Rottneros’ board considered the potential acquisition to represent both risk and opportunity but ultimately endorsed the takeover.
A statement from the SEK 1.5bn turnover company said: "The market for fine graphic paper is under a lot of pressure with limited or even declining growth.
"But it also means an opportunity to take part in developing one of Europe’s leading players in its field with a focus on bulk book paper and other paper products in the premium segment and with a presence in the growing Eastern European market."
Meanwhile, Arctic Paper's Munkedals mill has bought 50% of nearby water energy company Kalltorp Kraft to supply the mill with hydro-electric energy. The acquisition is part of Arctic Paper's strategy to decrease dependence on purchased energy and reduce the environmental impact of the mill.
