"Stora Enso has been looking for a new owner for the mill for some time, and we believe it will make a good fit," said Mlndal mill managing director Bjarne Bjrk.

Klippan will buy the Mlndal shares for 5m, and the balance will be paid by taking on the companys debt.

The deal is set to be completed on 2 April, and will see all the mills 400 employees transfer to Klippan.

Klippan president and chief executive Bengt stensson said Klippan would become one of the leading producers of coloured fine paper with the acquisition.

"We are forming a very strong group and will look at further acquisitions," he said.

Stora Enso Fine Paper senior vice president Stig Johansson said that despite the sale, the company was still looking at potential acquisitions.

The MultiArt and Mediaprint products will become Papyrus brand names, while Colorit will become a Klippan product.

The Mlndal mill has a fine paper capacity of around 80,000 tonnes a year, comprising 50,000 tonnes of multi-coated fine paper and 30,000 tonnes of uncoated coloured and white paper.

The mill also has a board sheeting capacity of 40,000 tonnes a year.

Story by Andy Scott