SCA and Graninge form new forestry and sawmill company

SCA and Graninge form new forestry and sawmill company SCA and Graninge intend to form a new forestry and sawmill company, AB Graninge-SCA. Graninge is contributing all of its assets in the forest and timber area, while SCA is contributing 8% of its forest holdings and one of the Group's four sawmills. Graninge's assets have been valued at 65% and SCA's at 35% of the company's total assets, which have a market volume of SEK 4,3 billion. SCA and Graninge will have equal influence over the company through vote differentiated shares. The new company's capital structure has been aligned to a stable cash flow that the company is expected to generate, whereby the debt/equity ratio of the company should be a multiple of about 2. Financing has been secured through bank financing. Consequently, SCA and Graninge can release capital concurrent with the formation of the company. The projected synergy gains resulting from combining the two companies amount to about SEK 75 M annually, among other measures, through restructuring of the sawmill operations and through coordination effects within forest management. Moreover, wood supply to the sawmills involved will improve. The assets provided by Graninge: 249,000 hectares of forest land and four sawmills - Bollsta, Rundvik, Graninge and Vilhelmina, with a total capacity of 605,000 m3. The assets provided by SCA: 144,000 hectares of forest land not included in the SCA parent company and the sawmill in Lugnvik with a capacity of 130,000 m3. The parties agree that the new company will be open to actively participating with other parties in a restructuring process for the sawmill industry in northern Sweden. The aim is to improve competitiveness through more rational production and strong efforts to develop so-called developed timber products for the joinery industry based on the company's high-quality raw material base. Kenneth Eriksson, President of SCA Forest Products, will be proposed as Chairman of the new company. The parties have proposed that Krister Fahlgren, currently President of Graninge Skog & Trä AB, be named President of the new company. The head office of the company will be in Bollstabruk. Co-determination negotiations with the trade unions have been initiated. For SCA, the merger means that * net debt is reduced by about SEK 920 M * active measures are being taken to initiate and participate in a restructuring of the sawmill industry in Northern Sweden. * an improved financial structure is achieved for parts of the Group's forest holdings. * the supply of raw materials to the Group's fiber-based industries in the region is improved. * earnings per share are improved. The transaction is expected to be completed as of 1 July 2000, following receipt of the requisite decisions and approvals. Stockholm 28 February 2000 SVENSKA CELLULOSA AKTIEBOLAGET SCA (publ) Corporate Communications For further information please contact: Bo Källstrand, President and CEO, Graninge, tel +46 8 753 50 01 Sverker Martin-Löf, President and CEO, SCA, tel +46 8 788 51 51 Krister Fahlgren, President, Graninge Skog & Trä, tel +46 612 88 031 Kenneth Eriksson, President, SCA Forest Products, tel +46 60 19 43 40 ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/02/28/20000228BIT00440/bit0001.doc http://www.bit.se/bitonline/2000/02/28/20000228BIT00440/bit0002.pdf

About Us

The core of SCA’s business is the forest, 2.6 million hectares in northern Sweden. Around this unique resource, we have built a well-developed value chain based on renewable raw material from our own and others’ forests. We offer paper for packaging and print, pulp, wood products, renewable energy, services for forest owners and efficient transport solutions. 2016 the forest products company SCA had approximately 4,000 employees and sales amounted to approximately SEK 15,4 bn (EUR 1,6 bn). SCA was founded in 1929 and has its headquarters in Sundsvall, Sweden. More information at www.sca.com.

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