Nordic wood pellets firms announce Latvian sell-out

Latvia’s wood pellet producer Latgran will be fully acquired by Estonian counterpart Graanul Invest on behalf of Swedish companies "BillerudKorsnas AB" and "Baltic Resources AB", company representatives informed LETA Friday.

The deal will be closed in July 2015, after terms of the agreement have been met.

"Latgran" produced 497,000 tons of industrial wood pellets at four factories last year, registering turnover in the amount of about EUR 73 million. The company plans to increase its production volume by about 20 percent in 2015, thanks to a new factory in Gulbene.

"Graanul Invest" is the largest wood pellet producer in the Baltic region, manufacturing 853,000 tons of pellets in 2014. The company owns four factories in Estonia and one in Lithuania. The company produces not only industrial wood pellets, but also high-grade or "premium" pellets. The company also operates in renewable energy industry, it owns four biomass cogeneration stations with the total capacity of 21 MWe.

"Baltic producers have acquired strong positions in the market. As a result of "Latgran" and "Graanul" merger, the largest European wood pellet company and one of the leading global players will be created, with the aim to produce 1.8 million tons of wood pellets in 2015," said Ilmars Kass, CEO of "Latgran".

The price of the deal was not revealed. Financial consultants for the deal are "SEB Corporate Finance" and "Superia Corporate Finance", legal consultant - "Cederquist".

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