Ahlstrom-Munksjö has signed a non-binding letter of intent with the majority shareholders of Hebei Minglian New Materials Technology Co., Ltd. to acquire the company, comprising a modern greenfield decor paper plant in the city of Xingtai, Hebei Province, China. The letter of intent contains customary exclusivity undertakings on the part of the sellers with respect to the considered transaction.

The debt free purchase price is approximately EUR 60 million.

Minglian New Materials was established in 2016 by a group of experienced entrepreneurs with a background in the Chinese decor industry through a greenfield investment in new paper machine technology and plant layout. The production started at the end of 2018 and the ramp-up has progressed well. The machine capacity is 50,000 tons per year.

By combining Minglian with its existing Decor business, Ahlstrom-Munksjö would have a strong presence in the world's two largest decor paper markets and improved cost competitiveness. The deal would allow Ahlstrom-Munksjö to leverage its brand and capabilities in the large and rapidly growing Chinese Decor paper market and strengthen Ahlstrom-Munksjö's ability to serve international customers both in the short- and long term.

Ahlstrom-Munksjö would provide technical and operational expertise to Minglian and strengthen Minglian's commercial opportunities in the domestic high quality segment and adjacent export markets.

The transaction is subject to further due diligence and final and binding transaction agreements, and it is expected to be completed during the first quarter of 2020.

Ahlstrom-Munksjö is a global leader in fiber-based materials. Products include: filter materials, release liners, food and beverage processing materials, decor papers, abrasive and tape backings, electrotechnical paper, glass fiber materials, medical fiber materials and solutions for diagnostics as well as a range of specialty papers for industrial and consumer end-uses. 

SOURCE: Ahlstrom-Munksjö