South African packaging and paper company Sappi has entered an agreement with multi-asset manager group Aurelius Investment Lux One Sàrl (Aurelius) for the sale of three graphic paper mills in Europe.
As part of the agreement, Aurelius will acquire Sappi’s mills in Maastricht, Netherlands, and Stockstadt, Germany, as well as the Kirkniemi Mill in Finland.
The enterprise value of this deal is around €272m ($265m).
The Maastricht Mill primarily produces 260,000t of coated woodfree paper and paperboard each year for use in printers and packaging converters.
The Stockstadt Mill is an integrated pulp and paper mill in Germany that produces 145,000tpa of pulp.
Pulp from this mill is used for manufacturing 220,000tpa of coated and uncoated woodfree paper annually.
Sappi’s integrated paper and pulp mill in Kirkniemi, Finland, produces 300,000tpa of bleached mechanical pulp.
The company uses this pulp for producing approximately 750,000tpa of coated mechanical paper grades, which are supplied to the global print publication industry.
The three mills are expected to contribute more than €1bn in revenue in fiscal 2022 (FY22).
The deal is subject to several standard suspensive conditions and is expected to close in the first calendar quarter of next year.
Sappi CEO Steve Binnie said: “We are very happy to have reached an agreement with Aurelius to take ownership of the three mills.
“Although they no longer fit in Sappi’s portfolio, they are strong assets with good people.
“The decision to sell these mills follows a detailed and thorough strategic review by Sappi in line with our group Thrive25 strategic focus.
“This includes reducing exposure to the graphic paper segment while expanding Sappi’s presence in segments including packaging and speciality papers, pulp and biomaterials.
“Recent investments across our South African, American and European operating businesses demonstrate this priority.”