UPM-Kymmene Corporation has launched arbitration proceedings against Metsäliitto Cooperative
Metsä Group Stock Exchange Release 2 November 2012 at 9.55 am EET
Metsä Group’s parent company, Metsäliitto Cooperative and Metsä Board Corporation (previously M-real) divested on 3 May 2012 a 24.9% strategic holding in Metsä Fibre Oy to Itochu Corporation for EUR 472 million.
In connection with the transaction, Metsäliitto exercised its call option to purchase UPM-Kymmene Corporation’s ownership in Metsä Fibre. As announced on 30 June 2011, Metsäliitto and UPM had conclusively agreed in an amendment agreement to the shareholders agreement on the price and procedure how UPM will divest its ownership in Metsä Fibre. According to this agreement, Metsä Fibre first on 30 June 2011 acquired the first part of UPM’s Metsä Fibre shares. On 24 April 2012, Metsäliitto exercised its call option to purchase UPM’s remaining 11 per cent ownership in Metsä Fibre for a previously agreed purchase price of EUR 150 million.
UPM has today commenced an arbitration proceeding in which it claims jointly from Metsäliitto and Metsä Board primarily EUR 58.5 million in damages and secondarily to return an EUR 58.5 million claimed unjust enrichment. The claims are based on an alleged breach of the tag-along clause specified in Metsä Fibre’s shareholders’ agreement signed in 2009.
Metsäliitto considers the claim unfounded and will not book provisions related to this claim. The claim does not have an effect on Metsä Group’s transaction and cooperation with Itochu and it is not based on agreements concluded with Itochu. The dispute initiated by UPM will be processed in a court of arbitration and the outcome will be announced later on.
For further information, please contact:
Esa Kaikkonen, Executive Vice President and General Counsel, Metsä Group, tel. +358 10 465 4749
Metsä Group is a responsible forest industry group whose products are part of people’s everyday life and promote sustainable well-being. Metsä Group produces high-quality products mainly from renewable Nordic wood. The Group’s business areas are tissue and cooking papers, board and paper, pulp, wood products as well as wood supply. Metsä Group’s sales totalled EUR 5.3 billion in 2011, and it employs approximately 12,500 people. The Group is present in some 30 countries.