In furtherance of the Holmen Group's strategic policy of growth and
development in newsprint and magazine paper, Holmen has reached an
agreement in principle to acquire Papelera Peninsular S.A. from Spanish
company Unipapel. The price corresponds to some MSEK 2,000 on a debt-free

The acquisition requires the consent of relevant competition authorities.

Holmen's President and CEO, Per Ericson, comments:

"With the object of more effectively meeting the needs of the key
customers, the Holmen Group shall grow not only organically but also via
acquisition. This acquisition will enable us to consolidate our position
as a leading supplier to European newspaper publishers. Holmen already has
a strong position in this field and the position of its standard newsprint
and higher added value specialty products can now be further strengthened.

Papelera Peninsular (PP) is located in a newly established industrial
district south of Madrid and comprises a newsprint mill that was
commissioned in the middle of 1998 and two associate companies for
collecting waste paper. Production is based solely on recycled paper,
which is collected mainly in Spain but also in Portugal. The unit employs
some 250 people.

During its first year of operation 1999, PP's total turnover corresponded
to some MSEK 700. The mill and the new paper machine whose output is being
successively raised, will have an annual capacity of some 200,000 tonnes
after running in.

In organisational terms, PP will become a production unit within the
Holmen Paper business area. Holmen Paper's President Göran Lundin,

"In common with the rest of Western Europe, the publishing industry in
the Spanish and Portuguese markets is going through a process of growing
concentration. This tendency, involving the sale of larger volumes to each
customer, is expected to continue, and together with PP, Holmen Paper will
become a powerful supplier with Spain and Portugal as a second domestic

"There is a considerable need to import wood-containing printing paper,
as the degree of self-sufficiency is only around 30 per cent in these
countries. Consumption nearly doubled during the 1990s, and is currently
running at more than 1,300,000 tonnes per year. In view of the strong
economic development expected in these two countries, with their 50
million inhabitants, the prospects for further growth in consumption are
bright," concludes Göran Lundin.