Nippon Paper to acquire Paper Australia+

TOKYO, Feb. 16 Kyodo - Nippon Paper Group Inc. said Monday it will acquire Paper Australia Pty Ltd. from its parent PaperlinX Ltd., the largest paper trading firm in Australia, as part of efforts to expand its overseas business.

Nippon Paper Group, which ranked second after Oji Paper Co. in the Japanese
market, said it plans to buy all outstanding shares in Paper Australia from
PaperlinX around May.
Nippon Paper will pay an upfront payment of A$600 million plus subsequent
payments linked to Paper Australia's performance in each of the fiscal years
ending in June 2010 to 2012. The total subsequent payments for the three years
will be between zero and maximum A$100 million.
The Japanese company will take over two of four manufacturing mills owned by
Paper Australia in the country and PaperlinX's sales and related units that
deal with Paper Australia's products.
Paper Australia, based in Victoria, logged sales of A$914 million or about 54.8
billion yen in the business year through June 2008. Excluding paperboard, which
is used for cardboard, the company is the largest paper maker in Australia.
Australia is one of the promising paper markets in the world and the country
historically has a low domestic production ratio, with capacity to expand its
domestic production in the future, Nippon Paper said.
The Japanese company said it expects to dramatically improve its position in
the Australian paper market through the acquisition of the Australian firm.
==Kyodo
2009-02-16 22:29:51