*** additional Press NotesUPM-Kymmene buys Canada's Repap for 120 mln euros
(UPDATE: Adds details)
HELSINKI, Aug 29 (Reuters) - Finnish forestry group UPM-Kymmene on Tuesday made its first foray back into North America since its failed bid for U.S. Champion, saying it would buy Canadian Repap for 120 million euros ($108.1 million).
``The acquisition supports UPM-Kymmene's long-term strategy,'' UPM, the world's third largest paper and board producer, said in a statement.
``The transaction strengthens UPM-Kymmene's global leadership in magazine papers and it is a logical step for UPM-Kymmene to become a major local magazine paper producer in North America.''
UPM said it would pay 0.20 Canadian cents per Repap Inc. (Toronto:RPP.TO - news) share, valuing Repap's equity at around 120 million euros. It said the price implied a total enterprise value of 1.01 billion euros for Repap, with the deal to create goodwill of around 300 million euros.
``UPM-Kymmene estimates that approximately C$50 million (37 million euros) in annual pretax synergies can be achieved by 2002,'' it said.
It was still considering its options with respect to Repap's debt.
UPM said the deal had to be approved by two-thirds of Repap shareholders, with a meeting on the merger expected by mid-October. Both boards of directors have approved the deal.
UPM, which lost Champion (NYSE:CHA - news) to U.S. industry leader International Paper (NYSE:IP - news) in May after making an initial bid in February, said Repap had agreed not to solicit competing offers, but it could respond to an unsolicited superior proposal.
UPM-Kymmene said it had the right to take a 19.9 percent stake in Repap in case a competing bid was made for Repap. It said Repap would be required to pay a break-up fee of 13.6 million euros ``in certain circumstances''.
RBC Dominion Securities Inc advised UPM, and Donaldson, Lufkin & Jenrette advised Repap, it said.
UPM-Kymmene's strategy is to remain one of the world's leading players in the rapidly consolidating industry and to grow faster than the industry average.
(US$ equals 1.110 Euro)