Billerud and Korsnäs to Merge, Creating a Leading Packaging Materials Company
The combination is a natural step to enhance the successful packaging material and packaging solutions businesses of Billerud and Korsnäs with the goal of creating a strong international player within the packaging industry.
20 Jun 2012 --- The Board of Directors in Billerud AB and in Investment AB Kinnevik announces the combination of Billerud and Korsnäs AB (the “Transaction”). The new company, BillerudKorsnäs, will become a leading virgin fibrne-based packaging materials and packaging solutions company with an annual turnover of approximately SEK 20 billion.
- The combination is a natural step to enhance the successful packaging material and packaging solutions businesses of Billerud and Korsnäs with the goal of creating a strong international player within the packaging industry.
- Both companies and their respective principal owners estimate a significant synergy potential to be realised within the next few years following the Transaction. Preliminary estimates of the yearly synergy effects amount to approximately MSEK 300.
- Billerud will acquire the shares in Korsnäs from Kinnevik. Kinnevik will receive shares in Billerud and a cash payment in exchange.
- Billerud will undertake a rights issue with preferential rights for BillerudKorsnäs' shareholders of MSEK 2,000 (the "Rights Issue") following the Transaction to strengthen the financial position.
- Kinnevik will, in the Transaction, receive 25.1 percent of the votes in Billerud and a cash payment of MSEK 3,200. Kinnevik has agreed to subscribe for MSEK 500 in the Rights Issue.
- The current main shareholder in Billerud, FRAPAG Beteiligungsholding AG ("Frapag") supports the Transaction and has agreed to subscribe for its pro rata share in the Rights Issue. After the Transaction, the main shareholders in BillerudKorsnäs will be Kinnevik with a 25.1 percent holding followed by Frapag with a 15.7 percent holding.
- Billerud assumes current net debt in Korsnäs amounting to MSEK 5,650 in connection with the Transaction.
- The Transaction includes Korsnäs, Kinnevik's 75 percent share in Latgran Biofuels AB ("Latgran") and Korsnäs' 5 percent share in Bergvik Skog AB ("Bergvik").
- Completion of the Transaction is subject to approval of relevant competition authorities and shareholder approval at the Extraordinary General Meeting in Billerud which is estimated to be held in the turn of August and September 2012.
"Together with Korsnäs, we are looking forward to creating a leading player within packaging materials with a solid platform for future growth. It is a Transaction with both industrial and a financial logic where the combined company will be very well positioned. Together we will be able to offer our customers a better and broader range of products. Korsnäs is the leader within its product areas which complements the product areas of Billerud and jointly the BillerudKorsnäs offering of smarter packaging solutions will be strengthened" says Per Lindberg, President and CEO of Billerud
"Billerud and Korsnäs hold leading positions in renewable packaging materials niches that complement each other well. Together the companies will become a unique player with the ability to create innovative and leading packaging solutions for a growing and environmentally conscious global market", says Christer Simrén, President and CEO of Korsnäs
"I am convinced that the combination of Korsnäs and Billerud is positive for both Korsnäs and the shareholders of Kinnevik. Kinnevik will become the largest shareholder of BillerudKorsnäs, which will be leading in packaging materials with strong market positions in its product areas. I am also looking forward to working with the management and Board of BillerudKorsnäs to continue to develop the new company" says Mia Brunell Livfors, President and CEO of Kinnevik
"Since we started to invest in Billerud shares in 2005, we have always looked into growth opportunities for the company. We are confident that the new combined group will be a world class packaging materials producer. We are happy to support the combination, even if we will be the second biggest shareholder after the closing of the transaction. The proposed rights issue will give the new group additional financial stability and has our full support. We look forward to working together with the new main shareholder to create an even better future" says Michael M. F. Kaufmann, President and CEO of Frapag