UPM-Kymmene has acquired German paper producer Haindl Paper in a deal worth around 2.1bn (E3.64bn), which is the culmination of a seven-year relationship.


UPM-Kymmene president and chief executive Juha Niemel said the industrial logic for the acquisition was absolutely compelling.
Vice president of investor relations Kari Toikka said Haindl had always been the top priority in our thinking. The company has enjoyed a very good reputation in its sectors.
The deal will be partly funded by selling some 300m of non-core assets, including shares in Nokia and Metso.


UPM-Kymmenes total paper production capacity will rise from 9.7m tonnes to 11.6m tonnes following the acquisition, enhancing its position in the magazine papers market.
It will also mean that our recycled paper usage is almost doubled, and for the first time we will have a mill presence in the German publication papers market, said Toikka.


The purchase covers the Haindl mills in Augsberg, Schongau, Duisburg-Walsum, Schwedt, and subsidiaries Parenco in the Netherlands and Steyrermhl in Austria.
UPM-Kymmene has also reached a separate agreement with Norske Skog to sell two of Haindls mills at Walsum and Parenco for 662m. Both deals will be subject to approval by the EU competition authorities.


Toikka said that Haindl had been made aware that the two mills would be sold. The reason for this was to make the acquisition easier to handle and to prevent the deal being refused due to increased market share.


Story by Andy Scott