On April 3, 2000, Fletcher Challenge Limited reached an agreement to sell its Paper Division to Norske Skogindustrier ASA (Norske), a leading global publications paper producer based in Norway, for approximately NZ$5.0 billion (US$2.5 billion). The Paper Division’s assets includes positions in pulp and paper mills in Australia, Brazil, Canada, Chile, Malaysia and New Zealand. With this acquisition, Norske will operate mills on five continents and become the world’s second largest manufacturer of newsprint.
Norske will pay cash for all the shares of the Paper Division at a price of NZ$2.50 per share and also make a payment to Fletcher which will be used to repay all outstanding indebtedness attributable to the Paper Division at closing. The transaction, which is one of the first plans of arrangement to be undertaken in New Zealand, requires Fletcher Challenge shareholder approval and the approval of Norske’s Corporate Assembly and is expected to close in July 2000.
Acting for Fletcher Challenge is a team led by Jonathan Lampe, with support from Robert Vaux and Michael Partridge (Corporate /Securities), Neil Harris, Mitchell Sherman and Carrie Smit (tax) of Goodman Phillips & Vineberg, in Toronto. Acting for Norske is White & Case in New York and Buddle Finlay in Auckland, New Zealand.