Remaining management members have been named for the joint venture UPM-Sappi are planning, four months after it was announced.
All of the appointments are provisional, pending regulatory approvals and the closing of the transaction.
Gunnar Eberhardt is to be chief executive, with Stephen Blyth to move from Sappi as CFO. UPM Communication Papers HR vice president Jan Gustafsson becomes HR senior vice president, with Sappi Europe chief executive Marco Eikelenboom as sales & marketing senior senior vice president.
UPM Communication Papers operations senior vice president Antti Hermonen takes a similar role in the joint venture, with Sappi Europe supply chain & procurement vice president Jan-Sander van Tuijl taking the supply chain role.
UPM and Sappi will continue to operate their respective businesses “independently and separately” until completion, under their existing management structures.
An agreement to form the joint venture was signed in May following a letter of intent late last year. The planned joint venture will include the entire UPM Communication Papers business and Sappi’s graphic paper business in Europe, and be owned 50/50 by UPM and Sappi. It will manage its own operations, resources, and decisions “within agreed shareholder boundaries”.
UPM president Massimo Reynaudo described it as “a necessary step to secure long-term commitment and supply continuity for graphic paper customers in Europe and strengthen the resilience of the entire European graphic paper industry”.
The new business will start on borrowed money, with 600 million Euros (A$970.65 million) of external financing plus 100 million Euros’ revolving credit, and shareholder loans. UPM and Sappi are contributing their respective businesses and assets with a combined enterprise value of 1,420 million Euros, “excluding the value of expected synergy benefits”.
Shareholder loans are to be repaid before dividends are distributed.
Aim of the project is to create “a sustainable standalone business that ultimately will provide divestment flexibility for both shareholders”. Three years after closing, with the joint venture expected to have completed the integration and realised the synergies, either shareholder may then initiate divest its shareholding.
Pictured: UPM produces woodfree coated and uncoated papers at its Nordland mill in Germany