Swedish manufacturers of paper and cardboard packaging Korsnäs and Billerud have reached an agreement to merge their businesses to form a leading virgin fibre-based packaging materials and packaging solutions company. Named BillerudKorsnäs, the new entity will have an annual turnover of approximately 20 billion Swedish crowns (SEK), approximately 2,3 billion euros (EUR).
Both companies estimate a significant synergy potential to be realised within the next few years following the transaction. Preliminary estimates of the yearly synergy effects amount to approximately SEK 300 million (about EUR 34 million): 60% in purchasing processes, 25% in selling and administration costs, 15% in production optimisation. Full effect of synergies is expected within 3 years from completion of the merger and will require investing about SEK 110 million to achieve synergies.
“It is a transaction with both industrial and a financial logic where the combined company will be very well positioned. Korsnäs is the leader within its product areas which complements the product areas of Billerud and jointly the BillerudKorsnäs offering of smarter packaging solutions will be strengthened,” commented Per Lindberg, President and CEO of Billerud. An opinion shared by Christer Simrén, President and CEO of Korsnäs: “Billerud and Korsnäs hold leading positions in renewable packaging materials niches that complement each other well. Together the companies will become a unique player with the ability to create innovative and leading packaging solutions for a growing and environmentally conscious global market.”