UPM Bids To Develop M-real Pulp Company

UPM has made an offer to M-real Corporation to buy Metsa-Botnia shares representing 15 per cent of Metsa-Botnia.

UPM has made an offer to M-real Corporation to buy Metsa-Botnia shares representing 15 per cent of Metsa-Botnia.

The offer is based on M-real's plan to sell Botnia shares, as announced in October.

UPM has offered EUR500 million for the shares.

UPM said its objective is to secure Botnia's strategic development and investments.

In cooperation with the other owners of Botnia, UPM added that it 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, that owns 47 per cent of Botnia's shares.

The other owners are M-real Corporation with 39 per cent and Metsaliitto Cooperative with 14 per cent 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, whilst the other 20 per cent is sold on the market, mainly in Europe.

UPM said that Botnia is currently constructing a pulp mill in Uruguay with annual capacity of one million tonnes.

The mill is scheduled to start operations during the third quarter of 2007.

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