International paper and packaging company Mondi Group will acquire 93.4% of the outstanding share capital of Nordenia International from Oaktree Capital Management, in a deal worth €638m ($782m).
As part of the acquisition, Mondi will assume Nordenia's €280m bond, which has a coupon of 9.75% and is due in 2017.
Following the completion of the acquisition, the group will reorganise its Europe and international division into four businesses of uncoated fine paper (UFP), packaging papers, fibre packaging and consumer packaging.
The acquisition, which is expected to be complete in the fourth quarter of 2012, will create a consumer packaging business through the combination of Nordenia and Mondi's existing consumer packaging activities.
According to Mondi's estimations, the acquisition will lead to €15m in annual pre-tax cost synergies, and will be able to keep its dividend policy unchanged.
Mondi Group chief executive David Hathorn, commenting on the acquisition, said, "The acquisition of Nordenia offers Mondi Group a unique opportunity to create a leading consumer packaging business, build on long term customer relationships across both businesses and establish a platform to expand further in high-growth emerging markets."
Nordenia is constructing a wholly owned greenfield plant in China, which is expected to begin operating in early 2014.
The company, which has operations across Europe, North America and Asia, achieves more than 90% of its revenues from the packaging and components of consumer products, such as pet food, diapers and chocolate bars.
Image: Mondi Group will acquire 93.4% of the outstanding share capital of Nordenia for $782m. Photo: Mondi.