Sweden-based paper and packaging firms Korsnas and Billerud have announced their plans to move ahead with a merger.
As a part of the deal, investment firm Kinnevik would sell its Korsnas packaging operations to Billerud for SEK2.7bn ($388m) to form merged group called BillerudKorsnas.
Kinnevik would have a 25% share in BillerudKorsnas in form of part payment towards Billerud shares, with the deal values Korsnas at SEK11bn($1.58bn).
FRAPAG Beteiligungsholding, Billerud’s principal shareholder, will have 15.7% of stake in the new entity.
Billerud chief executive Per Lindberg would be the resulting entity’s president and chief executive, while Korsnas president and chief executive Christer Simren would be the vice president and chief operating officer.
Korsnas president and chief executive Christer Simren said both firms have a niche in packaging materials and complement each other well.
"Together the companies will become a unique player with the ability to create innovative and leading packaging solutions for a growing and environmentally conscious global market." added Simren.
Billerud chief executive and president Per Lindberg hoped the firms would be able to offer a broader range of products to customers, strengthening the joint packaging offerings from both the companies.