The enterprise value of the deal – the second mill divestment announced this week by Stora Enso – is €150m (£130m), and it is expected to be funded in cash.

The transaction is expected to close no later than the first quarter of 2023 and is subject to customary closing conditions, including receiving the required regulatory approvals.

This transaction, like the sale of its Maxau paper site in Germany to Schwarz Produktion, is part of the earlier announced plan to divest four of Stora Enso’s five paper production sites.

In line with its strategy, Stora Enso’s focus is on long-term growth potential for its renewable products in packaging, building solutions, and biomaterials innovations.

Seppo Parvi, CFO and head of paper division at Stora Enso, said: “Following our recent agreement to divest the Maxau site, I am pleased that we found a good, experienced owner in Sylvamo for our Nymölla site. The process to divest the remaining paper assets continues.”

Sylvamo’s plan is to integrate the Nymölla site into its global paper business, and the 520 employees working at the mill will be part of the transaction. TreeToTextile, the sustainable textile fibre company based at Nymölla, is not part of the transaction and will continue operations at the site.

Sylvamo has mills in Europe, Latin America, and North America. Headquartered in Memphis, Tennessee, the business employs more than 7,500 people and its net sales for 2021 were $3.5bn (£3.04bn). Last month the business increased its full-year forecasts after posting a big jump in profits in Q2.

On the deal, it stated: “The Nymölla mill has an excellent environmental footprint, which complements Sylvamo’s purpose to produce paper in the most responsible and sustainable ways. The low-cost mill generates 85% of its energy needs from carbon-neutral, renewable biomass residuals.”

Jean-Michel Ribiéras, chairman and chief executive of Sylvamo, said: “The Nymölla mill is aligned with our three-pronged strategy of commercial excellence, operational excellence and financial discipline and our commitment to maximising value creation for Sylvamo shareowners.

“We expect this acquisition to strengthen our uncoated freesheet product mix, enable us to serve customers across Europe and around the world more effectively and be immediately accretive to our earnings per share and free cash flow.”

The integrated mill has two pulp lines and its capacity is 485,000 metric tonnes of woodfree uncoated office papers. It produces several brands, including Multicopy, and paper used for office printing, business forms, digital printing, and offset for printing books.

Based on the 2021 figures, the divestment is expected to reduce Stora Enso’s annual sales by approximately €290m. Stora Enso will, at closing, book a one-time disposal loss of approximately €20m in its IFRS operating profit, as an item affecting comparability, subject to closing date adjustments.

The divestment process continues for Stora Enso’s Hylte and Anjala paper sites with no committed timeline for conclusion. The company said the process has no immediate effect on its paper operations, which continue to serve their respective customers.

There is also a feasibility study ongoing at Stora Enso’s Langerbrugge site for the potential conversion of one of the two paper lines into a containerboard line. The company said it will continue to serve its Langerbrugge paper customers at least until the end of 2024.

In 2021, Stora Enso’s Paper division net sales were €1.7bn.

Last week the business also boosted its corrugated packaging offering with a €1bn-plus deal to acquire Netherlands-based De Jong Packaging Group.