Metsäliitto Cooperative to become the majority shareholder of Metsä-Botnia

Metsäliitto Group Stock Exchange Release 22 October 2009 at 8.30 a.m.

Metsäliitto Cooperative to become the majority shareholder of

Negotiations have been finalised between Metsäliitto Cooperative,
M-real Corporation and UPM-Kymmene Corporation on the new ownership
structure of Oy Metsä-Botnia Ab and the divestment of the Uruguay
operations to UPM. The agreement on the arrangement has been signed
on 22 October 2009. With the arrangement, Metsäliitto Group will
strengthen its position as a producer of Finnish long-fibre pulp and
will exit the production of short-fibre eucalyptus pulp.

"The agreement is an important step in the structural change we have
been consistently implementing, whereby we more strongly focus our
operations on select core functions. With the arrangement,
Metsäliitto Cooperative becomes the majority shareholder of
Metsä-Botnia, which allows us to better develop the wood raw material
and pulp flows from our own perspective. In addition, the transaction
also shows that we believe in the future competitiveness of Finnish
forestry industry products," says Kari Jordan, President and CEO,
Metsäliitto Group.

Metsä-Botnia's Uruguay operations included in the agreement comprise
the majority holdings of the Fray Bentos pulp mill and Forestal
Oriental, a company specialising in eucalyptus cultivation.
Metsä-Botnia and Metsäliitto Cooperative will sell their holdings in
these operations to UPM. The share to be sold by Metsä-Botnia is
82.1%, while that of Metsäliitto is 5.5%. The total debt and cash
free enterprise value of the Uruguay operations has been agreed at
about EUR 1.6 billion.

In connection with the transaction, Metsä-Botnia will distribute
funds to its shareholders and will also repurchase its own shares
from UPM. Metsä-Botnia will finance the payment of dividends, the
repayment of capital and the repurchase of its own shares with the
funds deriving from its divestment of the Uruguay operations and
shares in Pohjolan Voima Oy, and by utilising its existing financing
facilities. In connection with the transaction, Metsäliitto
Cooperative will also purchase 24.7% of Metsä-Botnia's shares from
UPM and 3.0% from M-real. The arrangement's net cash impact for
Metsäliitto Cooperative will be approximately EUR 110 million
negative. The total debt and cash free enterprise value of
Metsä-Botnia excluding its Uruguay operations and shares in Pohjolan
Voima Oy has been agreed at about EUR 1.9 billion.

After the transaction, Metsäliitto Cooperative will own about 53% of
Metsä-Botnia, M-real about 30% and UPM about 17%.

As part of the transaction, Metsä-Botnia will sell 77% of its shares
in Pohjolan Voima Oy to UPM at an agreed price of about EUR 66

The current cooperation agreements between Metsä-Botnia and its
shareholders will largely remain in force unaltered; furthermore
Metsä-Botnia will continue to operate as the sales channel for market
pulp produced by UPM and M-real.

Once the transaction has been completed, Metsä-Botnia will become a
subsidiary of Metsäliitto Cooperative, and will be entirely
consolidated in Metsäliitto Group. Metsäliitto Group's sales will
increase slightly and the arrangement will increase the equity of
both Metsäliitto Cooperative and Metsäliitto Group by about EUR 150
million. The arrangement will not have a material impact on the
equity ratio or the net gearing ratio of the parent company
Metsäliitto Cooperative. For Metsäliitto Group, the arrangement will
have a slight positive impact on the equity ratio and the net gearing
ratio. The equity ratio and liquidity of Metsä-Botnia will continue
to be good.

Pöyry Forest Industry Consulting Oy has acted as an expert in
determining the relative values of the Metsä-Botnia operations.

The transaction is expected to be closed latest during the first
quarter of 2010. The completion of the transaction requires, among
others, the approval of the competition authorities and the
completion of the financing arrangements.

Further information:
Esa Kaikkonen, General Counsel, Metsäliitto Group, tel. +358 10 465
Anne-Mari Achrén, Group CCO, Metsäliitto Group, tel. +358 10 465 4541

Metsäliitto Group's Pulp Industry
Metsä-Botnia is responsible for the pulp industry business of
Metsäliitto Group. Metsä-Botnia is a globally leading manufacturer of
chemical pulp, providing a wide range of products for its customers
who manufacture high-quality paper, packaging and tissue paper
products. Metsä-Botnia aims to be the world's leading provider of
fibre, fibre-based properties and added-value services. In 2008,
Metsä-Botnia had around 1,800 employees and its annual sales totalled
almost EUR 1.6 billion.

Metsä-Botnia in Finland
Metsä-Botnia's four Finland-based pulp mills are located in Äänekoski
(capacity 500,000 metric tons), Joutseno (650,000), Kemi (600,000)
and Rauma (650,000). At full capacity, the mills annually produce a
total of 2.5 million metric tons of bleached softwood and hardwood
pulp. A significant part of the production is sold to owner
companies' paper mills, and the rest are sold to the market, mainly
European and Asian customers.

Metsä-Botnia Svir Timber
Besides the pulp mills, the business includes the Russia-based Svir
Timber sawmill which produces annually around 200,000 m³ of softwood
sawn timber to meet the needs of planing mills, house factories, the
building and construction industry as well as supply chains.

About Us

Metsä Metsä Group is a forerunner in sustainable bioeconomy utilising renewable wood from sustainably managed northern forests. Metsä Group focuses on wood supply and forest services, wood products, pulp, fresh fibre paperboards and tissue and cooking papers. Metsä Group’s sales totalled EUR 5.0 billion in 2017, and it employs approximately 9,100 people. The Group operates in nearly 30 countries. Metsäliitto Cooperative is the parent company of Metsä Group and is owned by approximately 104,000 Finnish forest owners.