Finnish materials company Ahlstrom has signed an agreement with Munksjö’s principal owner EQT to combine its Label and Processing business area with Munksjö to form a single company Munksjö Corporation through two partial demergers.
As part of the agreement, Ahlstrom will receive about €150m in cash related to a net debt transfer. The mergers consist of the Label and Processing operations in Europe (LP Europe) and in Brazil (Coated Specialties).
In the first phase of the planned transaction, Ahlstrom and EQT will establish a new company to acquire the operations of Munksjö in exchange for new shares in Munksjö Corporation.
The European operations of Ahlstrom's label and processing business area will be later on separated through a partial demerger and transferred into Munksjö Corporation in exchange for its shares to be distributed to Ahlstrom's shareholders.
In the second phase, which is expected to be completed by the end of the second quarter of 2013, Coated Specialties, the Brazilian part of Ahlstrom's Label and Processing business area will be separated through another partial demerger into Munksjö Corporation.
Once fully implemented the deal is also expected to create synergies in the range of €25m to €30m, mainly relating to purchasing, production, pulp, logistics and sales. Upon completion, the current Ahlstrom's site in Turin will be jointly operated by Ahlstrom and Munksjö Corporation.
After the second phase, the shareholders of Ahlstrom will hold about 50% of the shares in the new company and Munksjö's shareholders will own about 29%, while other investors including Ahlstrom will hold the remaining 21% of the shares.
The plants that will be part of the deal include Osnabrück in Germany; La Gere, Rottersac and Stenay in France, the Label and Processing operations in Turin, Italy, as well as the Coated Specialties plant in Jacarei, Brazil.
