Stora Enso finalizes US$155M acquisition of Finnish sawmill Junnikkala

FINLAND – Stora Enso has completed the acquisition of Finnish sawmill company Junnikkala Oy, following a deal first announced in October 2024.

The transaction, valued at up to €137 million (US$154.83m), marks a strategic move to boost Stora Enso’s wood supply and sawmilling capacity.

The newly acquired operations will now be integrated into Stora Enso’s Oulu site, where a new packaging board machine is currently ramping up production.

The integration aims to enhance operational efficiency and secure a consistent supply of raw materials for the company’s expanding fibre-based packaging segment.

The acquisition will increase Stora Enso’s annual wood procurement in Finland by around 1.7 million cubic metres and expand its sawmilling capacity by approximately 700,000 cubic metres.

This growth strengthens the company’s wood products division and supports a broader product portfolio.

Central to the deal is Junnikkala’s modern sawmill in Oulu, which is expected to deliver long-term benefits. Once fully operational, the facility is projected to generate annual cost synergies of about €15 million (US$16.95m).

Performance-based valuation tied to output

The €137 million (US$154.83m) deal includes a performance-based component, where part of the payment depends on the new sawmill meeting specific production targets.

Stora Enso says this structure ensures that efficiency gains and output goals are achieved before the full value of the transaction is realized.

This acquisition supports Stora Enso’s broader strategy to reinforce its position in the wood processing and packaging markets.

By increasing production capacity and securing raw material supply, the company aims to bolster its competitiveness in the growing market for fibre-based packaging solutions.

The move follows a strong financial performance in Q1 FY2025. Stora Enso reported sales of €2.36 billion (US$2.68bn), a 9.1% increase from the same period last year, driven by higher prices and greater delivery volumes.

Adjusted earnings before interest and taxes (EBIT) rose for the fourth consecutive quarter to €175 million (US$199.44m), up 17.7% from €149 million (US$169.81m) in Q1 FY2024.

The EBIT margin also improved to 7.4%, from 6.9% a year earlier, supported by favourable pricing, volume growth, and currency effects despite higher fibre costs.

Operating profit jumped 21.7% to €171 million (US$194.88m), while pretax profit surged 40.8% to €132 million (US$150.43m). Net profit for the quarter climbed 40% to €107 million (US$121.94m).

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