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Paper maker UPM-Kymmene to buy rival Myllykoski

HELSINKI (AP) — Finnish paper maker UPM-Kymmene Corp. says it will acquire smaller rival Myllykoski Corp. and German-based Rhein Papier GmbH, together valued at some 900 million ($1.2 billion).

The world’s largest magazine paper maker says the deal will be financed by a share issue of 5 million UPM shares and debt arrangements amounting to 800 million. It did not disclose the exact size of the deal.

The transaction is subject to regulatory approval and is expected to close in the second quarter of 2011, UPM said Tuesday.

In September, UPM said it was in talks to merge with Myllykoski in an attempt to consolidate an industry struggling with overcapacity and plunging prices.

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