HELSINKI -- UPM announced it has signed an agreement to sell its Schwedt newsprint mill site and relevant assets to LEIPA Georg Leinfelder GmbH for the aim of a conversion into liner production. The entire personnel of Schwedt mill will transfer to LEIPA as old employees. The transaction price is Euro 70 million. The transaction is subject to customary third party approvals.

As part of the transaction, the parties have agreed to enter into a contract manufacturing agreement for newsprint for a transition period which would end latest at the end of 2017. The mill's capacity is 280,000 tonnes of newsprint annually.

LEIPA will convert the mill into liner production. The planned production capacity would be approximately 450,000 tonnes of liner annually.

"With this transaction UPM and LEIPA will have an improved opportunity to develop their businesses to meet the market needs. LEIPA is a solid and successful player in the liner business," says Winfried Schaur, Executive Vice President, UPM Paper ENA.

"The negotiations with LEIPA have proceeded well and we believe that the transaction will bring benefits to the employees in the form of future employment at a converted site," says Schaur.

UPM continues newsprint production at its Chapelle, Kaipola, Hürth, Schongau, Shotton and Steyrermühl mills.