We advised the Finnish forest industry company Metsä Group on selling its Estonian subsidiary Metsä Forest Eesti’s wood supply business to Combiforest, an Estonian woodworking company owned by Combiwood Grupp. The parties have also agreed on long-term deliveries of pulpwood and chips to Metsä Group.
Among the largest forest industry companies in the region
Metsä Group’s parent company, Metsäliitto, is a cooperative owned by more than 90,000 Finnish forest owners, who together own about half of Finland’s private forests. Metsä Forest Eesti is among the largest forest industry companies in Estonia, with its primary focus being on procuring timber and wood chips domestically and supplying timber to other companies within the Metsä Group. In 2023, Metsä Group´s Wood Supply and Forest Services sales totalled 2.2 billion euros, and it had around 700 employees.
Combiwood is one of the biggest employers in the Estonian wood sector, with 11 companies in the network and nearly 1,000 employees. Combiwood’s network includes sawmills and transportation and logistics companies, with its main export markets being Scandinavia, central Europe, and the USA. The group’s turnover in 2022 was nearly 245 million euros, with a profit of 36 million euros.
Combiwood strengthens its partnerships with suppliers
A board member at Combiwood Grupp, Gert Rahnel, stated that prior to this the conglomerate had lacked its own procurement unit. According to him, Combiwood’s mills had previously been doing the stocking themselves, and lacked a broad-based purchasing capability. “We could only buy what we needed ourselves,” he said. Now, Combiwood’s options are expanding, and according to Rahnel, this means Combiwood can become a better partner for suppliers, purchase a larger number of products from them, and improve its procurement security.
The transaction aims to further increase the flexibility of Metsä Group’s wood supply. All Metsä Forest Eesti employees will transfer to the new owner’s service as existing employees.
This transaction requires approval by the Estonian Competition Authority, which is expected to be received in the first half of 2024.
Our services and client team
We advised the client on all stages of the transaction, from organising the legal audit process to preparing transaction documents. This included assisting the client in the negotiation of the sale and purchase agreement, real-estate-related contracts and transaction terms, and the final signing of the transaction. We will continue to work closely with the client until the finalisation of the transaction following approval from the Estonian Competition Authority.
Our team included partner Paul Künnap, counsel Piibe Lehtsaar and senior associate Andra Grünberg.
