Stora Enso Buying Wis. Paper Co.
Feb. 22, 2000
HELSINKI, Finland (AP) _ The Finnish-Swedish forest products company Stora Enso is buying Consolidated Papers Inc. of Wisconsin for about $4 billion in the latest trans-Atlantic consolidation in the paper business.
The deal announced Tuesday would create a major paper producer with about $12.4 billion in revenues and 47,000 employees. It is the second global merger in the paper and pulp industry within a week.
Last Thursday, Europe's largest forest products company, UPM-Kymmene, announced a $6.6 billion purchase of Champion International Corp. of Stamford, Conn. That company would have annual revenues of about $14 billion and 50,000 employees.
Under the latest deal, Stora Enso is offering $44 for each share of Consolidated, half in cash and half in stock, a rich premium of 70 percent over Consolidated's closing value of $26 per share Friday. Stora Enso will also assume about $900 million in debt from Consolidated.
Shares in Consolidated, which is based in Wisconsin Rapids, Wis., soared after news of the merger agreement came out, gaining $10 or more than 38 percent to $36 in trading at 4:30 p.m. on the New York Stock Exchange.
Consolidated Papers is North America's largest producer of coated paper and uncoated printing papers, and is a leading manufacturer of specialty papers. It employs some 7,000 people in North America.
Helsinki-based Stora Enso was formed in 1998 through the merger of Finland's Enso and Stora of Sweden. It makes magazine paper, newsprint, fine paper and packaging boards, and employs 40,000 people worldwide.
The acquisition is subject to approval by regulatory commissions and shareholders. It was unanimously approved by the boards of directors of both companies.
Consolidated has Wisconsin plants in Biron, Kimberly, Niagara, Stevens Point, Whiting and Wisconsin Rapids. It also has a plant in Duluth, Minn., and owns nearly 700,000 acres of woodland in Wisconsin, Michigan, Minnesota and Ontario.