Peninsula Daily News news sources
TOKYO — Nippon Paper Group Inc. said Monday it will acquire Paper Australia Ltd. from its parent, PaperlinX Ltd., the largest paper trading firm in Australia, as part of efforts to expand its overseas business.
Among Nippon’s other overseas businesses is Port Angeles-based Nippon Paper Industries USA, which operates a paper mill at the entrance to Ediz Hook.
Nippon Paper Group, which ranks 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 $600 million Australian ($390.2 million U.S.) 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 a maximum of $100 million Australian ($65 million U.S.).
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 in southeastern Australia, logged sales of $914 million Australian ($594.3 million U.S.) in the year ending in 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.
