Stora Enso announces intention to acquire Bergvik Skog's forest assets
In Sweden, shareholders representing 98 percent of the owners in Bergvik Skog AB, a Swedish forest holding company, have agreed to initiate discussions, based on a non-binding Letter of Intent (LoI), aiming at structural changes in Bergvik Skog Group. As a shareholder, global forest industry major Stora Enso Oyj has announced its intention to acquire a substantial part of Bergviks Skog's Swedish forest assets.
The restructuring of Bergvik Skog would involve dividing the company’s assets between the owners. These shareholders are Stora Enso, Länsförsäkringar, FAM, BillerudKorsnäs, Kåpan Pension, Tredje AP-fonden, Persson Invest, Karl Hedin AB and Tham Invest.
The wood supply agreement with Bergvik Skog, established 15 years ago, expires next year. Together with our partners, we have had a successful journey which now comes to an end. The planned transaction is a natural next step for us, as we strongly believe in the bioeconomy and want to secure our competitive raw material supply in the long term. We will seek support from the remaining 2 percent outstanding shareholders as well as all other relevant stakeholders, said Karl-Henrik Sundström, CEO of Stora Enso.
Bergvik Skog’s Swedish forest assets are owned by its subsidiaries Bergvik Väst AB and Bergvik Öst AB, representing approximately 83 percent and 17 percent respectively. As a result of the planned restructuring, Stora Enso would transform its current ownership of 49.3 percent in Bergvik Skog, to a direct holding of approximately 70 percent of the value of the forest assets in Bergvik Väst.
Further, approximately 15 percent of Bergvik Väst would be directly owned by FAM, and approximately 15 percent directly owned by a consortium of smaller shareholders. Forest industry colleague BillerudKorsnäs would acquire Bergvik Öst. The remaining assets of Bergvik Skog would be liquidated or contributed to the forest holding entities.
As a result of the restructuring, Bergvik Väst would be consolidated as a subsidiary to Stora Enso. The transaction would result in a cash out effect of EUR 250–300 million. Stora Enso’s current debt would increase by approximately EUR 800 million.
The final agreements are currently under negotiations between the parties with the aim of initiating the transactions during the first half of 2018. During the transaction and transition period, there will be business as usual for Bergvik Skog. The final agreements are subject to relevant approvals.
About Bergvik Skog AB
Founded in 2004 to acquire Stora Enso’s and Korsnäs’ forestland in Sweden, Bergvik Skog AB owns approximately 2.3 million hectares (ha) of land in Sweden and about 0.1 million ha in Latvia, and is one of Europe’s largest private-sector forest owners. In addition to certified wood fibre sales, the company leases out land for hunting and fishing.
Bergvik Skog produces annually about 60 million seedlings in its three nurseries. Bergvik Skog is contributing to increasing the use of renewable energy through production of biomass fuels from forests, and development of wind power.