|
|
 |
|
Note 4 - Major Acquisitions and Disposals
 Acquisitions
Consolidated Paper Acquisition Goodwill
Disposals
There have been no major changes to the Group during the year. The substantial acquisition of Consolidated Papers, Inc. in 2000 has been followed by a period of consolidation and adjustment whilst the Group considers its future strategy and potential areas of expansion.
Acquisitions
Stora Enso acquired a majority holding in Holzindustrie Schweighofer GmbH in December 1998 for a total acquisition cost of EUR 122.9 million, of which EUR 82.9 million represented goodwill. A portion of the purchase price was paid in cash and the remainder in shares of Stora Enso Timber Oy, leaving the Schweighofer family, through SPB Beteiligungsverwaltung GmbH of Austria, with a 26.5% interest in Stora Enso Timber Oy. On 16 August 2001 the Board approved the purchase of the Schweighofer family's minority holding for a total acquisition cost of EUR 154.5 million, of which EUR 81.5 million represented goodwill to be amortised over ten years; following this purchase, Stora Enso Timber Oy became a wholly-owned subsidiary. By unifying ownership, the purchase will facilitate growth and enable the Group to take a more active role in the consolidation and development of the timber industry.
On 9 October 2001 Stora Enso acquired Purple Charta Investments´ 20% shareholding in Stora Enso Suzhou Paper Co, thereby raising its stake to 80.87%, with the local Suzhou Hua Sheng Paper Mill and Suzhou Handicraft Industry Cooperative holding the remaining 19.13%. The total acquisition cost of EUR 24.0 (USD 21.9) million resulted in a goodwill element of EUR 28.4 million due to the negative net assets of the business, but the intention is to develop the business. Stora Enso Suzhou Paper Co is currently the second biggest supplier of coated fine paper in the Chinese market, with an annual capacity of 150 000 tonnes, and consists of the Suzhou Mill near Shanghai together with a sales network of six offices covering all the main markets in China.
The acquisition of Consolidated Papers, Inc. ("CPI") was completed on 31 August 2000 at a purchase price of USD 3 604.1
(EUR 4 046.3) million at prevailing exchange rates, but this was subsequently adjusted to USD 3 600.4 (EUR 4 085.3) million. The price was allocated to assets and liabilities based on estimated fair values at the acquisition date, but in the one year period thereafter the fair value of the assets was adjusted by USD -13.7 (EUR -15.6) million and deferred taxes by USD 6.8 (EUR 7.7) million. The ultimate value of the goodwill, being USD 1 710.1 (EUR 1 940.4) million, represents the excess of the purchase price over the estimated fair value of the acquired net assets and is amortised over 20 years.
|
|
|
|
| |
|
|
|
|
|
| Conversion of CPI shares |
|
1 529.7 |
|
1 717.2 |
|
| Cash purchase |
|
2 030.1 |
|
2 279.4 |
|
| Conversion of CPI stock options |
|
22.0 |
|
24.7 |
|
| Acquisition related expenses |
|
18.6 |
|
20.9 |
|
| Translation difference |
|
- |
|
43.1 |
|
| Total Purchase Price for the Equity |
|
3 600.4 |
|
4 085.3 |
|
| |
|
|
|
|
|
| Less: |
|
|
|
|
|
| Book value of net assets acquired |
|
1 363.2 |
|
1 530.7 |
|
| Fair valuation of net assets |
|
955.7 |
|
1 073.1 |
|
| Deferred taxes from valuation |
|
-428.6 |
|
-481.2 |
|
| Translation difference |
|
- |
|
22.3 |
|
| Fair Value of Net Assets Acquired |
|
1 890.3 |
|
2 144.9 |
|
| |
|
|
|
|
|
| Goodwill |
|
1 710.1 |
|
1 940.4 |
|
In January 1999 Stora Enso initiated a compulsory redemption of Stora shares and offered to purchase all outstanding Stora Series A and Series B shares at a price of SEK 88 per share. At 31 December 1999 Stora Enso held 98.7% of the shares, having used a total of EUR 83 million to purchase minority shares between January and December 1999. A total of EUR 49 million was used to purchase the remainder of the shares in 2000 and at 31 December 2001 Stora Enso held 100% of the shares.
Disposals
On 10 November 2000 Stora Enso and AssiDomän AB signed an agreement concerning the formation of a new 50/50-owned company, Billerud AB, following an agreement in principle in October 2000 to incorporate into this new company the Stora Enso Gruvön paper mill, together with the AssiDomän mills in Karlsborg and Skärblacka. The amount of operating capital released amounted to EUR 350 million, an impairment charge of EUR 71.1 million was recorded in 2000 and the formal merger took place on 1 January 2001. On 10 October 2001 Stora Enso agreed to sell 40% of its shareholding in Billerud AB, representing 20% of the company, to AssiDomän AB for EUR 62.8 (SEK 580.7) million in accordance with an Option Agreement made in 2001; the financial effect of this transaction was minor, as the sales price approximated book value, and there was little change in interest-bearing net debt. Billerud AB shares were listed on the Stockholm Stock Exchange on 20 November 2001 and at the year-end Stora Enso had a 30% shareholding, but with an intention to divest at some time in the future.
The Newton Kyme mill site in the UK is currently on the market following the ceasing of production on 21 December 2000, with final customer despatches being made on 31 March 2001. The mill had an annual capacity of 40 000 tonnes of packaging boards impermeable to fat and moisture, but the manufacture of these products was no longer commercially viable.
The sale of the Stora Enso non-mill power assets to Fortum Oyj was closed in mid-2000, the deal having a total asset value
of EUR 1 889.8 million, a profit before tax of EUR 524.8 million and a related tax expense of EUR 110.4 million; the transaction did not include Stora Enso's shares in Pohjolan Voima Oy.
In 1999 Stora Enso sold Tervakoski Oy to an Austrian company Trierenberg AG and the fixed assets of Dalum to a group of Danish investors, for an aggregate sales price of EUR 120 million. The gain on the sale of Tervakoski Oy amounted to EUR 24.5 million whereas Dalum was sold at book value following a write-down to net realisable value in 1988 of EUR 32.0 million. Stora Enso also sold its holdings in Teollisuuden Sähkönmyynti Oy and its holdings of
Series C Shares of Pohjolan Voima to Eastern Group plc.
|
|
|
