Thursday, August 18, 2022
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Mercer International Inc. and HIT Holz’s majority owners, agreed that Mercer would acquire all outstanding shares of HIT Holzindustrie Torgau GmbH & Co.KG’s parent company (“HIT wood”).
Mercer International Inc. has signed a contract to purchase all of the HIT parent company’s outstanding shares for a total of €270 million. HIT owns a 100% stake in two German facilities: one in Dahlen, which processes wood into garden items, and one in Torgau, which processes timber and makes pallets with value-added services.
Wood pellets and briquettes, two types of biofuel, are made from sawmill residuals. HIT now has the capacity to process up to 410MMBF of timber, and there are numerous high-yield investment options to increase capacity.
Mercer’s solid wood operations in Germany have increased dramatically as a result of this acquisition, according to Mr. Juan Carlos Bueno, Chief Executive Officer. It will allow them to build on synergies with their German activities, notably complementing the Friesau sawmill. Additionally, the acquisition would allow to expand Mercer’s product mix with the introduction of pallets and biofuels.
Outcomes of the acquisition
Five biomass-fueled power stations with a combined capacity of 15 MW are included in the acquisition.
After the acquisition, Mercer will be the biggest German pallet manufacturer and will have an additional capacity for electricity generation in addition to a combined annual lumber capacity of about 960MMBF.
Block pallets are traditionally the main product on the flat wooden pallet market in Europe. Standard format block pallets, the majority of which are a part of exchange and pooling systems, account for the largest share of the European wood pallet market. In the German market, open pooling systems account for 80% of wood pallet exchanges while closed pooling systems account for 20%.
The merger advances Mercer International Inc.’s long-term goal of expanding timber processing and wood production business while generating significant synergies and is immediately accretive.
Known for its modern, high performance, fully integrated wood processing facility, HIT also serves as the world’s largest producer of EPAL wood pallets used for shipping.
Tags: ligna, MERCER, wood, wood and panel, woodworking and manufacturing, woodworking and timber processing, woodworking industry, woodworking UK
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