UPM has offered to buy part of M-real's Botnia shares

Archive 9.11.2006 0:00 EET

(UPM, Helsinki, November 9, 2006) – UPM has made an offer to M-real Corporation to buy Metsä-Botnia shares representing 15 % of Metsä-Botnia. The offer is based on M-real's plan to sell Botnia shares as announced in October. UPM offers EUR 500 million for the shares.

UPM's objective is to secure Botnia's strategic development and investments. In cooperation with the other owners of Botnia, UPM wants to make Botnia a successful, increasingly international pulp company, which has the financial prerequisites to grow and develop. UPM also sees opportunities to strengthen the competitiveness of Botnia's Finnish pulp production.

Botnia is an associated company of UPM, who owns 47% of Botnia's shares. The other owners are M-real Corporation with 39% and Metsäliitto Cooperative with 14% of shares.

Botnia is Europe’s second largest pulp producer with five mills in Finland and production capacity of 2.7 million tonnes a year. About 80 per cent of production is sold to the paper mills of Botnia’s owners, while the other 20 per cent is sold on the market, mainly in Europe. Botnia is currently constructing a pulp mill in Uruguay with annual capacity of 1 million tonnes. The mill is scheduled to start up during the third quarter of 2007.