Korsnäs and Billerud are to merge in “a natural step to strengthen their successful businesses” in virgin fibre packaging material. Swedish investment company Kinnevik, the owner of Korsnäs, will have the largest stake in the new operation, whose synergy potential has been assessed to be at least SEK300 million/year. It is expected to have an annual turnover of approximately SEK 20 billion.
Per Lindberg, the current CEO of Billerud, will be CEO and president of the new company – BillerudKorsnäs – and Korsnäs CEO Christer Simrén will be vice president and chief operating officer. Transaction values Korsnäs, at approximately SEK11 billion on a debt-free basis, which is approximately SEK400 million higher than the estimated fair value in Kinnevik’s interim report on 31 March 2012.
Kinnevik CEO and president Mia Brunell Livfors comments: “I am convinced that the merger is positive for both Korsnäs and Kinnevik’s shareholders. The merged business will be a leading packaging company with strong market positions within its key product segments. The cash proceeds resulting from the transaction create additional financial flexibility for Kinnevik, while offering continued exposure to an attractive industry that has been part of the Kinnevik investment story since the Company’s inception.”
Completion of the transaction is subject to approvals from the relevant competition authorities, and of the Billerud shareholders at an Extraordinary General meeting to be held in August.