The company's management reports that the “USD 1 billion transaction will enable the company's management to build a stronger Stora Enso.” Stora Enso is making substantial investments in bioproducts, pulp, paper and next-generation, higher value-added engineered wood products.

Stora Enso will sell 12.4% of its forest holdings in Sweden, amounting to roughly 125,000 hectares of forest land with a value of EUR 900 million (or USD 1.02 billion).

Under the terms of the transaction, Stora Enso will enter into a new 15-year wood supply agreement (with an option to extend it for a further 15 years) with the buyer, a newly established company. Its owners are Wallenius shipping lines' parent company Soya Group (40.6%) and a consortium led by MEAG, the asset manager of the German insurance company Munich Re (44.4%). Stora Enso will retain a 15% ownership stake.

The transaction, which was announced in October and updated in February, forms part of a plan to strengthen the company's balance sheet and reduce debt; it will improve Stora Enso's adjusted EBITDA by EUR 25 million a year and cut debt by EUR 790 million.

“We are committed to building a stronger Stora Enso. As a result of this transaction, our financial stability will be strengthened further. By strategically converting part of our forest assets into cash while retaining full access to wood supplies, we are taking a proactive step to reduce debt,” says Stora Enso President and CEO Hans Sohlström. “The transaction will not only improve our financial flexibility, but will also allow us to benefit from the value of our forest assets. We look forward to building a strong partnership and successful cooperation with the new owners.”