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CROSS-ATLANTIC DEAL: UPM-KYMMENE AND CHAMPION UNITE IN $30-BILLION MERGER

STAMFORD, CT — UPM-Kymmene Corporation of Helsinki, Finland, and Champion International Corporation of Stamford, CT, plan to join forces, creating the industry’s first substantial cross-Atlantic merg…

STAMFORD, CT — UPM-Kymmene Corporation of Helsinki, Finland, and Champion International Corporation of Stamford, CT, plan to join forces, creating the industry’s first substantial cross-Atlantic merger. If the deal goes through, the combined company would have a market capitalization of almost $30 billion, and an assumed debt of $7 billion. The combined company will be called Champion International, use UPM-Kymmene’s logo, the Griffin, and have its headquarters in Helsinki.

The new entity will have production plants in 17 countries, with a total capacity (based on 1999 figures) of 12.1 Mt. Its production portfolio includes such products as northern softwood and hardwood pulps, coated papers and uncoated freesheet.

Globalization played a major role in the deal, a fact underscored by both companies’ top executives. “This merger solidifies UPM-Kymmene’s position in the top tier of global paper and forest products companies,” said Juha Niemela, president and chief executive officer of UPM-Kymmene. Added Richard E. Olson, chairman and chief executive officer of Champion International: “We are very excited about this combination. With this merger, we immediately achieve the scale and market presence required to succeed in a global economy.” Niemela will become chief executive officer of the combined company, and Olson, executive vice-president.

UPM-Kymmene and Champion together have about 49,000 employees. Cost savings of about $460 million have been identified, mainly through the elimination of duplicated services and improvements in management practices. The merger requires the usual approvals of shareholders and regulatory agencies in Europe and the United States. The merger is expected to close in the first half of 2000.