Sappi Limited, the South Africa-based parent of U.S coated magazine paper maker Sappi Fine Paper North America, recently announced that it has signed an agreement to acquire the coated graphic paper business of M-real for 750M Euro ($1.1B).

 

The transaction includes the acquisition of M-real's coated graphic paper business, including four paper mills in Finland, Germany, and Switzerland. M-real will retail ownership of two mills, one in Sweden and one in Finland, operating as contract producers for Sappi under supply agreements. The transaction also includes long-term supply agreements for wood, pulp, and other services.  

 

Sappi expects to increase its European graphic paper production from 2.6 to 4.5 metric tons per year as a result of this acquisition. "The products and brands which have been acquired are an excellent complement to our strong market offering, enabling us to offer our existing, as well as new customers in Europe, North America and globally, a broader range of products coupled with excellent customer service,” Sappi Limited CEO Ralph Boëttger said in a statement.

 

While Sappi may increase its graphic paper production in this move, there will be a net reduction in the market's overall coated freesheet capacity as a result of this acquisition. M-real has so far announced a 600,000 ton reduction at their two remaining mills. This reduction will have some effect on the availability of imports to North America, possibly serving to further tighten the U.S. coated freesheet market and discourage further price erosion.    

 

 

Sappi papers used by Lane Press customers: Opus, Somerset

M-real papers used by Lane Press customers: Galerie