All clear for the new Scaninge Timber AB

All clear for the new Scaninge Timber AB Graninge AB and Svenska Cellulosa AB SCA have today signed the agreements which finally regulates the formation of Scaninge Timber AB following the go-ahead given by the EU Commission on 5 July when it announced its so- called decision of non-intervention. The company, which will be jointly- owned by Graninge and SCA, will be one of the ten biggest sawmill groups in Europe. Graninge will put in all its forest holdings and four sawmills, while SCA will contribute with its sawmill in Lugnvik and those forests which are not directly owned by the parent company. The new company will be based in Bollstabruk, Västernorrland. Graninge will contribute with all of its assets in the forestry and timber areas (249,000 hectares of forest and four sawmills in Bollstabruk, Rundvik, Vilhelmina and Graningebruk), while SCA will put in 8 per cent of their forest holdings (150,000 hectares) as well as the Lugnvik sawmill. Graninge's assets are valued at 65 per cent and SCA's at 35 per cent of the company's total assets, which have an estimated total market value of 4.3 billion Swedish kronor (SEK). Differentiated voting shares will give SCA and Graninge equal say in the running of the company. Within two years, the merger is expected to lead to synergy gains of some 75 million SEK per year, partly through a restructuring of the joint sawmill activities and also through greater investments in further processing . Furthermore, the supply of timber to the sawmills in question will be greatly improved. Finance has been secured through borrowing from banks. In this way, with the formation of the new company, both Graninge and SCA are able to make significant sums of capitals available. Lars Enslöf, MD and Chief Executive at Graninge AB, said in a comment; - This is a very good solution for Graninge. I would like to say to those employees concerned that Scaninge has every opportunity of becoming something of a base for the on-going restructuring of the sawmill industry in Norrland. This would not have been possible if we had retained control of our wood product activities. - For our shareholders, the merger means that we can focus on our energy business. The 2.1 billion SEK which immediately becomes available will come in handy for our continued expansion. - At the same time, we retain a significant capital sum in Scaninge. This gives us a share in the build-up of value which should result from the restructuring of the forest and sawmill industries in Norrland. Krister Fahlgren, MD of Scaninge Timber and earlier MD of Graninge Forest & Timber, said in a comment; - Scaninge Timber will be an offensive player, which together with other partners can participate in the on-going restructuring of the sawmill industry in Norrland. The effectiveness and efficiency of the new company will be considerable. Not least important is that we will secure a high degree of self-sufficiency of forest raw materials, around 70 per cent. For more information: Krister Fahlgren +46 (0)70 645 55 78 Lars Enslöf +46 (0)8 753 50 04 Kalle Karlsson, Head of Information, Graninge, +46 (0)70 683 43 43 Björn Lyngfelt, Head of Information, SCA Forest Products, +46 (0)70 626 82 23 ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/07/10/20000710BIT00620/bit0001.doc http://www.bit.se/bitonline/2000/07/10/20000710BIT00620/bit0002.pdf