Billerud and Korsnäs to merge

Billerud AB (STO: BILL) and Investment AB Kinnevik (OMX: KINV B) announced the aimed combination of Billerud and Korsnäs Ab this morning. The new company BillerudKorsnäs would be a leading globally oriented virgin fibre-based packaging materials and packaging solutions company with an annual turnover of around 20 billion SEK. The companies estimate significant synergies, with preliminary estimates at 300 million SEK following a few year integration period.

The deal will be done in an asset swap where Billerud will first acquire Korsnäs shares from Kinnevik and then give Billerud shares in return raising Kinnevik’s stake in Billerud to just over a quarter (25.1% of shares) and also 3.2 billion SEK cash. Billerud will then conduct a 2 billion SEK rights issue with preferential rights BillerudKorsnäs’ shareholders, where Kinnevik has agreed to take part. The transaction is subject to Billerud shareholder approval and competition autorities’ approval stamp. Billerud’s largest shareholder FRAPAG Beteiligungsholding AG (15.7%) is in favour of the deal.

The new company will be among the leaders in production and sales of liquid packaging board and other high-quality paperboard, containerboard and packaging material. Combined sales volumes in 2011 totalled 870 kilotons of cartonboard, 570 kilotons of containerboard and 1 200 kilotons of packaging paper. The new company aims to enhance its position in Food & Beverage, Consumer Goods and Industrial segments with international expansion in sight. The companies see the long-term outlook of packaging industry as position. A live press conference related to the deal will be accessible from billerud.com at 10.00 AM CEO.