#Finland #Helsinki #Nasdaq Stockholm #Stora Enso #forest assets

Stora Enso's Strategic Transformation into a Publicly Listed Forest Company

Stora Enso, a renowned name in renewable materials, has embarked on a significant restructuring journey that aims to convert its Swedish forest assets into the largest publicly listed pure play forest company in Europe. This pivotal decision comes after a comprehensive strategic review conducted by Stora Enso's Board of Directors, which assessed various approaches to enhance operational focus and shareholder value.

Background and Motive

The decision to initiate preparations for a statutory partial cross-border demerger was announced on November 14, 2025. This transition is a response to Stora Enso’s commitment to maximize the potential of its respective businesses while reducing group complexity. By creating a separate entity for its forest assets, Stora Enso seeks to leverage its core strengths, unlocking value for shareholders and ensuring robust market opportunities.

The proposed demerger, slated for completion in the first half of 2027, will involve the establishment of a new publicly traded company on Nasdaq Stockholm and Nasdaq Helsinki, with its headquarters based in Falun, Sweden. Stora Enso’s shareholders will receive shares in this new entity, effectively owning all shares in the newly formed company as demerger consideration.

Financial Outlook and Market Position

The new company will manage over 1.2 million hectares of forest land in Sweden, valued at approximately EUR 5.7 billion as of September 30, 2025. This asset class is not only significant in size but holds potential for long-term value appreciation, aided by the natural growth of the forest stock. Historically, Swedish forest assets have yielded a total return of around 7% per annum over the past 30 years, making this a lucrative venture for investors seeking stability and inflation-resilient returns.

Stora Enso maintains a robust presence in the renewable materials and packaging sectors, which positions it favorably in the market. The separation is expected to refine focus on the distinct business operations of both the materials sector and the newly formed company, thereby enhancing operational efficiencies and shareholder returns.

The Role of Shareholders and Future Plans

Stakeholder support is critical for the success of this transformation. Major shareholders, including Solidium Oy and FAM AB, collectively holding approximately 21% of shares and 55% of voting rights in Stora Enso, have expressed their backing for the demerger. This collective endorsement underlines the belief in the strategic merits of separating the company’s diverse operations.

Additionally, upon completion of the demerger, Stora Enso will enter into a long-term wood supply agreement with the new company. This contract, spanning 18 years, will not only secure a consistent supply of wood for the new entity but will also ensure Stora Enso has a reliable revenue stream as both companies grow independently.

Strategic Focus Moving Forward

As Stora Enso prepares for this strategic shift, the upcoming Capital Markets Day in London on November 25, 2025, will serve as a platform to share insights into the refined strategy and objectives of both companies. Among the anticipated changes are actions to optimize land holding value, renewable energy projects, and initiatives aimed at carbon sequestration - all factors contributing to the new company’s capabilities for value generation in the long term.

This restructuring is a significant milestone in Stora Enso’s evolution and reflects a broader trend in the industry toward specialization and heightened shareholder value. The company's leadership, including Executive Vice President Tuomas Hallenberg, who has been appointed as the CEO for the new company, stresses the importance of this change in driving growth and maximizing shareholder returns.

In summary, Stora Enso's transformative journey to create the largest listed pure play forest company in Europe marks a promising future for both the existing enterprise and the newly formed business, driven by a vision to enhance operational focus and shareholder engagement in the evolving market landscape.