Stora Enso to Spin Off Swedish Forest Assets, Creating Europe's Largest Pure-Play Forest Company

Strategic Demerger to Create New Forestry Giant

Stora Enso, a leading provider of renewable materials, has announced its intention to spin off its extensive Swedish forest assets into a new, independent publicly listed company. This strategic demerger, anticipated to be finalized in the first half of 2027, is poised to create Europe's largest listed pure-play forest company. The assets involved are valued at approximately $5.7 billion (equivalent to €5.7 billion as of September 30, 2025).

The decision follows a comprehensive strategic review initiated in June 2025, aimed at enhancing focus and maximizing shareholder value for both the core Stora Enso operations and the new forestry entity. The new company will encompass more than 1.2 million hectares of forest land in Sweden and will establish its headquarters in Falun, Sweden. It is intended to be listed on both Nasdaq Stockholm and Nasdaq Helsinki, with all shares distributed to current Stora Enso shareholders.

Rationale and Future Focus for Both Entities

Stora Enso's Board of Directors views the separation as the optimal path to sharpen strategic focus and unlock the full potential of its businesses. The primary objectives include:

• Reducing overall group complexity.
• Optimizing capital allocation.
• Enhancing shareholder value.
• Allowing each entity to pursue distinct growth strategies.

Following the demerger, Stora Enso will intensify its focus on its core businesses of renewable materials and packaging. Meanwhile, the newly formed forest company will concentrate on value creation through sustainable forest management, renewable energy, and carbon sequestration. To ensure continued operational synergy, a long-term 18-year wood supply agreement will be established, guaranteeing Stora Enso approximately 9% of its Nordic wood and fiber supply from the new entity.

Leadership and Shareholder Support

Tuomas Hallenberg, currently Executive Vice President of Stora Enso's Forest business, has been appointed as the President and CEO of the new forest company. This leadership appointment underscores the commitment to a seamless transition and focused growth for the independent entity.

The planned demerger has garnered significant support from Stora Enso's major shareholders, Solidium Oy and FAM AB, which collectively hold approximately 21% of shares and 55% of voting rights. The move is also a continuation of Stora Enso's portfolio optimization, following a recent divestment of approximately 175,000 hectares of forest land for €900 million earlier in 2025. The finalization of the demerger remains subject to approval by a general meeting of Stora Enso shareholders and relevant regulatory clearances.