Carter Holt spends $311M on pulp purchase

By Phil Boeyen, ShareChat Business News Editor

Monday 26th March 2001

Carter Holt Harvey will pay $311 million to buy Norske Skog's Tasman kraft pulp business.

The Commerce Commission approved the purchase last week, but says the acquisition is conditional on final Australian regulatory clearance and final due diligence of some contracts.

The purchase contract includes an additional payment of up to US$10 million, depending on global pulp prices over the next two years.

Carter Holt CEO, Chris Liddell, says it's a significant acquisition for the company.

"We've consistently said we will invest the COPEC funds at the right time, on the right opportunities and at the right price. This acquisition is a significant and tangible demonstration of this strategy.

"We look for opportunities where the industry has attractive growth options, where a business is performing well, and where we can add value because of our expertise. Tasman Pulp delivers on all of these."

CAH says the business has a strong customer based in Australasia and demand in Asia is growing significantly.

It is also expecting to gain synergies between Kinleith and Tasman Pulp, both operationally and in marketing.

The company says that when the purchase takes effect from the end of next month it will own two of the lowest cost pulp producers in the world.

Norske Skog acquired the Tasman business last year when it bought Fletcher Paper and says the sale continues its strategic focus on publication papers worldwide and a commitment to exit non-core activities.

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