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Investing.com -- Stora Enso (HE:STERV) shares surged over 18% on Thursday following its announcement of a strategic review of its Swedish forest assets.
The Finnish pulp and paper manufacturer is considering a possible separation and public listing of the assets through a partial demerger.
The review, part of Stora Enso’s focus on renewable packaging, aims to increase business focus, streamline operations and unlock the full value of both its forest assets and core packaging business.
The company stated it is exploring various options, including a separation and listing of the forest business into a new entity wholly owned by existing shareholders.
If executed, the move would create two independent companies. Stora Enso would continue its renewable packaging operations, while the new entity would become Europe’s largest listed pure forest company.
The company described the forest assets as possessing a distinct operational, financial and strategic profile with potential for long-term value appreciation and new revenue streams.
Stora Enso recently agreed to divest approximately 175,000 hectares of Swedish forestland for an enterprise value of €900 million, in line with book value.
After this transaction, it retains ownership of over 1.2 million hectares of forestland in Sweden, including 1.0 million hectares of productive forestland.
As of March 31, 2025, the retained forest assets have a fair value of approximately €5.8 billion.
"Our Swedish forest assets exemplify excellence in sustainable forestry operations and environmental stewardship," said Hans Sohlström, president and CEO of Stora Enso.
"Initiating this strategic review underscores our commitment to maximising shareholder value while ensuring alignment with our long-term strategic objectives. By evaluating various strategic options, we aim to enhance business focus, reduce complexity, and unlock the full potential of both our forest and industrial assets."
The company plans to provide an update on the strategic review by the end of 2025. All potential changes are subject to co-determination negotiations and legal procedures in all impacted countries.