Moelven Industrier to acquire ARE-group

Finnforest Corporation's subsidiary Moelven Industrier ASA and the Scandinavian
ARE-group have signed a conditional agreement whereby Moelven will purchase
ARE-group. 


ARE-group has five plants in Sweden and one in Norway for sawmilling and
further processing wood products, as well as a distribution network for its
products. The sawmills have a total annual capacity of 350,000 m3, and the
further processed production capacity is 240,000 m3 per year. 

ARE-group's turnover is about 900 million Swedish kronor, about 100 million
euros, and its balance sheet totals 500 million Swedish kroner, about 55
million euros. ARE-group has 300 employees. 

It is intended that the transaction will be finalised 1.1.2004. The price will
not be published. The purchase will be financed by increasing Moelven
shareholders' equity by 120 million Norwegian kronor, and through cash flow and
loan facilities. 

Moelven is Scandinavia's leading wood products industry group. Finnforest and
Finland's Metsäliitto Group acquired a majority shareholding in Moelven in
2001-2002. That purchase lived up to expectations: Moelven's operations are
profitable and there are good prospects for expanding activities. 

The ARE-group acquisition will help Finnforest and Moelven in reaching their
joint strategic goals. For Moelven itself the purchase marks a significant step
on the way to the company's achieving its objectives in Scandinavia. It
strengthens Moelven's operations in Norway and, even more particularly, in
Sweden. In line with its strategy, by acquiring ARE, Moelven will be able to
make good use of the whole chain of supply from wood procurement to basic
production, and further to the distribution of further processed products, in
Scandinavia's geographic core area. When combined with ARE-group, Moelven's
turnover will rise to 5.4 billion Norwegian kroner, or about 680 million euros. 

“The ARE-group and Moelven operations fit together very well,” says Bo
Borgström, Moelven President and CEO. “By combining them we will improve our
customer service and strengthen our range of skills and product range. The
people who work in ARE-group are skilled professionals and the company makes
quite a good profit. Our position in Scandinavia will become still stronger.” 

For further information please contact:
Bo Borgström, President and CEO, Moelven Industrier ASA, +47 99 10 52 00
Ari Martonen, President and CEO, Finnforest Corporation, +358 50 2406

The following Are companies are included in the sale:
Are Brug AS, Spydeberg, Norway. Established in 1972, acquired by Are in 1985.
Planing mill. Produces wood-based construction materials, treated wood and
panelling. Sales volume: 110,000m3. Annual turnover: NOK 220 million. Total
number of employees: 40. 

Are Skogsprodukter, Ed, Sweden. Established in 2002 (Are 80% and Norske Skog
20%). Wood supply and transport company. Total number of employees: 16. 

AB Edanesågen, Edane, Sweden. Established in 1863, acquired by Are in 2000.
Sawmill and planing mill. Sawn timber: 110,000 m3; Planed timber: 90,000 m3.
Annual turnover: SEK 250 million. Total number of employees: 72. 

Årjängs Såg AB, Årjäng, Sweden. Acquired by Are in 1982. Sawmill. Annual
production: 100,000m3. Annual turnover: SEK 160 mill. Total number of
employees: 45. 

Nössemarks Trä AB, Nössemark, Sweden. Acquired by Are in 1979. Sawmill. Annual
production: 60,000m3. Total number of employees: 30. Annual turnover: SEK 110
million 

Tom Heurlin AB, Ånimskog, Sweden. Sawmill. Acquired by Are in 1999. Sawmill and
planing mill. Sawn timber: 80,000m3; Planed timber: 85,000m3. Total number of
employees: 78. Annual turnover: SEK 200 million. 

Finnforest, owned by the Metsäliitto Group, is the largest mechanical forest
products corporation in Europe. Its two industrial divisions are Solid Wood,
which produces sawn timber products, and Engineered Wood, which manufactures
higher value-added articles. Finnforest offers wood-based product and service
solutions to its customers in the construction, industrial, distribution and
retailing segments. The corporation is active in over 20 countries, in
Scandinavia the operation are the responsibility of Moelven. The Corporation
employs nearly 8,000 employees. 

Moelven is Norway's largest supplier of building products and accompanying
services. The Moelven Group is organised into five business areas: Timber
(sawmills), Wood (processing), Laminated Timber, Modular Buildings and Modular
System Interiors. The products Moelven supplies are industrial timber,
industrial chips, wood-based building goods, construction materials, supporting
building elements, commercial buildings, flexible interior layouts and
electrical installations. Moelven currently has 43 companies in Scandinavia.
Annual turnover is NOK 4.5 billion. Total number of employees is 3,000. 

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