International Paper has signed an agreement to purchase newsprint mill in Madrid, Spain, from Swedish company Holmen Paper, for €150m.
As per the deal, International Paper will acquire the Madrid newsprint Mill, as well as recycled paper collector Cartón y Papel Reciclado (Carpa) and Holmen′s 50% stake in the energy producer Peninsular Cogeneración.
Planned to be completed during the second quarter of 2016, the transaction is subject to certain regulatory approvals.
International Paper Europe, Middle East & Africa president Jean-Michel Ribieras said: "The Madrid facility represents a strategic opportunity to grow our corrugated packaging business in EMEA by further enhancing our value proposition and offering our customers even more choices in terms of innovative, tailored and high performing packaging solutions.
"This acquisition is a significant investment into the future of our corrugated packaging business in EMEA, our customers, our employees, and our communities, and we are excited to be making this strategic step."
Upon completion of the deal, International Paper intends to convert the newsprint facility and produce recycled containerboard during the second half 2017.
The converted facility, which is expected to have a capacity of 380,000 tons, will complement the firm's corrugated packaging business in Europe, Middle East & Africa.
The divestment is a part of Holmen's effort to focus on developing specialty paper strategy at Swedish mills.
Holmen CEO and president Henrik Sjlund said: "Holmen has the base in renewable forest and energy assets supplemented by industrial operations in paperboard, printing paper and sawn timber.
"After the sale of the Madrid mill, the printing paper operations have the potential to deliver good profitability."
Image: Holmen Paper headquarters in Norrkping, Sweden. Photo: courtesy of User:Thuresson/Wikipedia.
