(Updates with deal terms in second paragraph.)
Feb. 1 (Bloomberg) -- Billerud AB, Europe’s second-largest manufacturer of sack paper, agreed to buy UPM-Kymmene Oyj’s packaging paper businesses in Pietarsaari and Tervasaari for 130 million euros ($171 million.)
The deal gives Billerud machines used to make sack and packaging paper for the food, retail, and construction industries and will be financed with cash and debt via existing credit facilities, the Stockholm-based company said in a statement today. The plants had sales of 220 million euros last year, Billerud said.
“The acquisition will give us a strong platform to continue developing our offering within smarter packaging solutions,” Billerud Chief Executive Officer Per Lindberg said in a statement. “In addition, the acquisition significantly reduces our pulp exposure and adds a much larger euro cost base, which we view positively.”
The deal marks the second sale of a Nordic packaging business in two weeks. Last month DS Smith Plc agreed to buy most of Sweden’s Svenska Cellulosa AB’s packaging operations for 1.6 billion euros. Svenska Cellulosa sees a need for consolidation in the industry, it said then.
UPM-Kymmene, Europe’s second-biggest papermaker, rose as much as 4.6 percent and traded 2.3 percent higher at 10.12 euros as of 11 a.m. in Helsinki. Billerud fell as much as 5.9 percent and was down 2.9 percent at 58 kronor in Stockholm.
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