<b>Holmen Reaches Deal to Buy Spanish Mill</B>

Holmen reached a definite agreement to acquire Papelera Peninsular from the Spanish group Unipapel.

The acquisition requires the consent of the competition authority.

Papelera Peninsular owns a two-year old newsprint mill, located south of Madrid, and two associate companies for collecting recovered paper.

The new newsprint machine is currently being brought up to its rated capacity, which, after trimming, will amount to some 200,000 metric tons per year. The entire production is based on recovered paper.

Holmen's President and CEO, Per Ericson, comments: "The acquisition is in line with the Holmen Group's strategic direction, which involves growth and development in newsprint and magazine paper. The acquisition will enable us to further consolidate our already strong position as a leading supplier to European newspaper publishers."