File Photo: The Mondi paper factory in Merebank, Durban.
DURBAN - Mondi's share price gained more than 4percent last month, boosted by its year-end acquisition of Powerflute Group Holdings for a total consideration of 365million (R5.44billion) on an enterprise value basis.

Mondi share price climbed to R329.42 a share on the JSE yesterday morning, 4.48percent higher than the R315.30 a share recorded at the beginning of last month.

Mondi also traded 2percent higher on December 22, on the announcement of the acquisition. Powerflute is a division of Nordic Packaging and Container Holdings.

Powerflute operates an integrated pulp and paper mill in Kuopio in Finland with an annual production capacity of 285000 tons of high-performance semi-chemical fluting.

Diverse range

Powerflute’s premium semi-chemical fluting is sold to a diverse range of customers, primarily for packaging fresh fruit and vegetables, but also other end-uses such as electronics, chemicals and pharmaceuticals.

Around half of the company’s production is sold in Europe, while the remainder is exported globally.

Mondi chief executive Peter Oswald said the acquisition supported the group’s strategy of investing in high-quality packaging and paper assets. “We are excited by this opportunity to expand our customer offering by further broadening our containerboard product range,” he said.

The transaction remained subject to competition clearance and customary closing conditions and is expected to complete in the first half of 2018. Powerflute will be integrated into Mondi’s Packaging Paper business unit.