UPM completes sale of newsprint mill to LEIPA

UPM,  Helsinki, has signed an agreement to sell its Schwedt newsprint mill, located in Germany, and relevant assets to LEIPA Georg Leinfelder GmbH  for EUR 70 million ($77 million). In making the acquisition LEIPA says it plans on converting the newsprint mill into a linerboard facility that would be capable of producing around 450,000 tonnes of finished product per year. The deal was first announced this past April.

As part of the transaction, UPM and LEIPA have entered into an interim contract manufacturing agreement for newsprint for a transition period, which would end at the end of 2017. The mill's capacity is 280,000 tonnes of newsprint.

“With this transaction UPM and LEIPA will have an improved opportunity to develop their businesses to meet the market needs. LEIPA is a solid and successful player in the liner business,” says Winfried Schaur, executive vice president, UPM Paper ENA (Europe and North America).

“The negotiations with LEIPA have proceeded well and we believe that the transaction will bring benefits to the employees in the form of future employment at a converted site,” Schaur adds.

With the sale of the Schwedt mill UPM will be producing newsprint at its mills in Chapelle, France; Kaipola, Finland; Hürth and Schongau, Germany; Shotton, U.K; and Steyrermühl, Austria.

The LEIPA group of companies produces about 900,000 metric tons of graphic paper and packaging paper per year at its Schwedt and Schrobenhausen mills.