Stora Enso's Major Move: Birth of Europe's Largest Listed Pure Play Forest Company

Stora Enso's Strategic Transformation

In a significant move within the forestry and renewable materials sectors, Stora Enso has announced the initiation of a strategic review that will result in the establishment of the largest publicly listed pure play forest company in Europe. The decision, conveyed during a press announcement on November 14, 2025, comes as the company aims to hone its focus on its forest assets while simultaneously enhancing operational efficiency and shareholder value.

Demerger Details

In a bid to streamline operations and maximize potential, the Board of Directors has decided to separate its Swedish forest business into a new entity through a statutory partial cross-border demerger. The expected completion date is set for the first half of 2027. This newly formed company will be wholly owned by Stora Enso’s shareholders, distributing shares proportionately based on their current holdings. This separation is anticipated to create an entity housing over 1.2 million hectares of forest land in Sweden, projected to hold a fair value reaching approximately EUR 5.7 billion as of September 30, 2025.

Stora Enso noted the need for this strategic pivot, emphasizing the company's commitment to the renewable materials and packaging markets. By reassessing its structure and focusing on core strengths, Stora Enso aims to reduce complexity while positioning itself as a leader in sustainable practices.

Financial Implications and Strategic Support

The decision to demerge comes after a comprehensive evaluation of various options, including the divestment of roughly 175,000 hectares of forest land for around EUR 900 million. Stora Enso’s major shareholders, Solidium Oy and FAM AB—who collectively secure approximately 21% of the shares and around 55% of the voting rights—have expressed their support for this strategic move, marking a united front towards the impending transformation.

The formation of the new purposed company aims to unlock unprecedented potential through focused management of forest assets that are expected to yield stable cash flows and diverse revenue opportunities. These benefits include enhanced forest management initiatives, renewable energy projects, and carbon sequestration strategies, providing a favorable environment for both growth and sustainability.

Leadership and Future Prospects

Tuomas Hallenberg, currently serving as Executive Vice President of Stora Enso’s Forest Business, has been appointed as President and CEO of the new Swedish forest business. Hallenberg’s expertise is expected to guide the new entity towards achieving its ambitious financial and operational goals while also ensuring strategic alignment with Stora Enso’s existing operations.

Kari Jordan, Chair of Stora Enso’s Board of Directors, commented on the demerger saying, "This marks a milestone in our company’s history, establishing a strong foundation for independent growth while enabling enhanced value creation for both entities. As we pursue this strategic path, we remain committed to maximizing shareholder value."

Hans Sohlström, President and CEO of Stora Enso, added that the two companies will uphold a strategic relationship through a long-term wood supply agreement dedicated to secure Wood for the new entity while simultaneously offering flexibility to other customers. This agreement aims to lower risks associated with demand fluctuations while ensuring robust growth trajectories based on market rates.

What Lies Ahead

As Stora Enso prepares for its Capital Markets Day scheduled for November 25, 2025, the company aims to further elaborate on its refined strategies and future objectives. The proposed demerger is dependent on various approvals, including those required by the General Meeting of Stora Enso shareholders and other legal frameworks in the impacted regions.

As the forestry industry navigates a challenging landscape, Stora Enso's strategic overhaul positions the company to capitalize on emerging opportunities in the renewable materials sector. By cementing its leadership role in sustainable practices while optimizing its operational framework, Stora Enso sets a compelling example for others in the industry. The anticipated formation of Europe’s largest listed pure play forest company marks not just a transformation for Stora Enso, but also underscores the increasing importance of sustainability within global markets.