Stora sells US business for $2.5 billion

Stora Enso Oyj has agreed to sell its North American coated paper operations, with headquarters in Wisconsin Rapids and six mills in Wisconsin, to Ohio-based NewPage Holding Corp. in a deal valued at more than $2.5 billion.

The bulk of the coated papermaking operations going to NewPage are what used to be Consolidated Papers Inc., based in Wisconsin Rapids. The Finnish Stora Enso had bought Consolidated in August 2000 for $4.4 billion. Wisconsin facilities include about 3,000 workers in Biron, Kimberly, Niagara, Stevens Point, Whiting, and Wisconsin Rapids.

The acquisition would more than double the employment base and production capacity of NewPage, making it North America's leading maker of paper used in magazines and catalogs.

NewPage began in May 2005 from the sale of the papers group of MeadWestvaco Corp. to the private investment firm of Cerberus Capital Management. Earlier this year, Cerberus took automaker Chrysler private through a $7.4 billion deal with DaimlerChrysler AG.

Under the agreement, NewPage would pay Stora Enso about $1.5 billion in cash, a $200 million note, and a 19.9 percent interest in the new company, which will be called NewPage. The company's headquarters would stay in Miamisburg, Ohio.

Stora Enso valued its stake in the new company at $370 million and said the deal includes NewPage assuming net liabilities of about $450 million, making the transaction worth more than $2.5 billion.

NewPage estimated that the combination last year would have generated $4.1 billion in revenue and $583 million in earnings before interest, taxes, depreciation and amortization. NewPage expects the combined companies to save about $265 million a year in costs.