SEATTLE (Scrap Monster): Stora Enso announced that it has reached an agreement with Swiss-based family-owned business Model Group to divest its Sachsen Mill located at Eilenburg, Germany. The enterprise value of the transaction is estimated at Eur 35 million. The transaction is expected to close during the third quarter of the current year.
According to the agreement, upon closing of the transaction, Sachsen Mill will be owned and operated by Model Group. However, Stora Enso will continue to sell and distribute paper products manufactured by the mill facility for a period of 18 months, for which it has already agreed upon a contract manufacturing agreement. After this period, Model will convert the facility into a containerboard mill. Model Group will absorb all the 230 employees at the mill.
Commenting on the deal, Kati ter Horst, EVP, Stora Enso’s Paper division hoped that Model will be a good owner to ensure long-term development of the Sachsen Mill. Stora Enso will continue to serve its customers with high quality paper products from the mill at least until the end of the next year.
Meantime, Daniel Model, Chairman and CEO noted that the mill is a perfect fit into our value chain within our existing network of operations. The company looks forward to develop the site further.