The company is also to sell its Finnish building materials merchant Puukeskus Oy to a private equity investor for an undisclosed sum.
“We have been selling off business units since 1996,” said UPM’s senior vice president of investor relations Olavi Kauppila. “ We decided to focus on non-core businesses and sell them. We have now almost completed that process.”
UPM’s sale of the Eteläesplanadi 2 head office (ttjonline March 07) to German-based Allianz Lebensversicherungs AG will result in a capital gain of around €37m.
About 300 UPM staff will remain at Eteläesplanadi 2 under a long-term lease arrangement. Around 100 staff have transferred to more cost-efficient premises.
Meanwhile, UPM’s sale of Puukeskus to Triton, expected to be completed during the third quarter, is part of the company’s plan to sell its wood products merchants to concentrate on its core business.
Puukeskus operates 28 branches in Finland and one in Estonia. It will continue to be the sole distributor of UPM products to building companies, consumers and other customers in Finland and Estonia.
UPM, which will make a capital gain of €90m from the sale, will continue to serve its big industrial customers direct.
The company says its profitability improvement programme is progressing as planned but €123m costs associated with the programme, plus a €110m value reduction in the group’s Finnish forest assets, will reduce second quarter profits.
