Canadian newsprint giant Abitibi is currently the largest newsprint manufacturer.

The acquisition will give Norske a major footprint in the lucrative Chinese newsprint market with control of two newsprint manufacturing plants in China as well as two facilities in Korea and one in Thailand.

"Sole ownership of PanAsia will give us full access to the world's largest and fastest-growing newsprint market," said Norske Skog chief executive Jan Oksum (pictured).

PanAsia owns the Korean plants and has majority shareholdings in the Chinese and Thai factories.

When the deal is complete, some 25% of Norske Skog's total newsprint and magazine-grade capacity will be located in Asia.

The deal is subject to the approval of the competition and regulatory authorities. It will be financed by a 341m share issue, underwritten by Deutsche Bank and Nordea. The share issue was approved on 22 September at an EGM. Trading is expected to begin on 26 October.

Oksum said the move was in line with the strategy of investment in PanAsia over the past seven years. PanAsia will change its name to Norske Skog PanAsia.

Norske Skog market share
Newsprint 13%
Magazine paper 8%
Total capacity
Current 8.9m tonnes
After PanAsia deal 10.7m tones