UPM-Kymmene of Finland has agreed on the acquisition of the North American Blandin Paper Company. The seller is Fletcher Challenge Canada Limited, a member of Fletcher Challenge Group of New Zealand. The acquisition price is USD 650 million. "To step into magazine paper production in the United States has been one of our key strategic goals. The acquired company is one of the most modern paper mills manufacturing LWC paper, with central location and good reputation in the market", says Mr. Juha Niemelä, President and CEO of UPM-Kymmene. Based in Grand Rapids, Minnesota, Blandin Paper Company, with an annual capacity of 450,000 tonnes, is one of the biggest LWC magazine paper manufacturers in North America. The company's turnover accounts for approximately USD 400 million and the number of employees 970. The acquisition includes the company-owned 77,000 hectares of forest land in the United States, from where the mill receives approximately one fourth of its annual wood raw material. The Blandin Paper Company is Fletcher Challenge's only LWC paper mill. With its total production capacity of over three million tonnes per annum, UPM-Kymmene is the world's biggest manufacturer of magazine papers. With this acquisition, UPM-Kymmene's magazine paper production is, for the first time, being established outside Europe. In addition, the acquisition strengthens UPM-Kymmene's position in the US market. At present, the Group annually exports to the United States around half a million tonnes of coated and uncoated magazine papers. On the whole, the annual US magazine paper market exceeds 6 million tonnes, accounting for more than 40 per cent of the global 16 million tonnes' paper consumption of these paper grades. In the short term, the acquisition's effect on the UPM-Kymmene earnings per share is expected to be neutral. In the longer term, technology transfer and specialisation will improve production efficiency, together with additional synergy benefits, which will be achieved in logistics. UPM-Kymmene's equity to assets ratio, 44 per cent at the end of June 1997, will decrease, due to this acquisition, by less than three percentage units. Completion of the acquisition is subject to the necessary regulatory approvals and is expected to take place before 30 November, 1997. For further information:Mr. Juha Niemelä, President and CEO, UPM-Kymmene, tel. +358 204 15 0001Mr. Kari Toikka, Vice President, Investor Relations, UPM-Kymmene, tel. +358 204 15 0014Mr. Jay Whitwham, Vice President, Secretary and Treasurer, Fletcher Challenge Canada, tel. +1-604-654 4486 Notes to Editors: BLANDIN PAPER COMPANY Blandin Paper Company is a wholly-owned subsidiary of Fletcher Challenge Canada, which is a 51 per cent owned subsidiary of Fletcher Challenge Group of New Zealand. Based in Grand Rapids, Minnesota, Blandin Paper Company is one of the biggest LWC magazine paper manufacturers in North America. Blandin Paper Company was established in 1902, and was acquired by Fletcher Challenge Canada Limited in 1977. Since then the mill has been extensively upgraded and modernized. The company is one of the leading manufacturers of ultra light weight coated (ULWC) and light weight coated (LWC) groundwood paper for use in magazines, catalogues, coupons, direct mail marketing and newspaper inserts.