Filed by UPM-Kymmene Corporation
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed the pursuant to Rule 14a-12
of the Securities Act of 1934
Subject Company: Champion International Corporation
Commission File No.: 001-03053
[Presentation posted by UPM-Kymmene Corporation
on its web site on March 15, 2000]
[Slide 1]
These materials contain certain statements that are neither reported financial
results nor other historical information. These statements are forward-looking
statements within the meaning of the safe-harbor provisions of the U.S. federal
securities laws. These forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially from those
expressed in the forward-looking statements. Many of these risks and
uncertainties relate to factors that are beyond the companies' ability to
control or estimate precisely, such as future market conditions, the behavior of
other market participants and the actions of governmental regulators. These and
other risk factors are detailed in the two companies' SEC reports. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date of these materials. The companies do not undertake any
obligation to publicly release any revisions to these forward-looking statements
to reflect events or circumstances after the date of these materials.
Investors and security holders are advised to read the joint proxy
statement/prospectus regarding the business combination transaction referenced
in the foregoing information, when it becomes available, because it will contain
important information. Such joint proxy statement/prospectus will be filed with
the Securities and Exchange Commission by UPM-Kymmene and Champion
International. Investors and security holders may obtain a free copy of the
joint proxy statement/ prospectus (when available) and other related documents
filed by UPM-Kymmene and Champion International at the Commission's website at
www.sec.gov. The joint proxy statement/prospectus and the other documents may
also be obtained from UPM-Kymmene by contacting UPM-Kymmene, Attn: Reko
Aalto-Setala, Etelaesplanadi 2, FIN-00101 Helsinki, Finland, and/or Champion
International by contacting Champion International, Attn: Tom Hart, One Champion
Plaza, Stamford, Connecticut 06921.
Champion International, its directors, executive officers and certain other
members of Champion International management and employees may be soliciting
proxies from Champion International shareholders in favor of the merger.
Information concerning the participants will be set forth in the joint proxy
statement/prospectus when it is filed with the Securities and Exchange
Commission.
[Slide 2]
Juha Niemela, CEO
Morgan Stanley Dean Witter
Global Paper & Forest Products Conference
New York, March 15, 2000
[Slide 3]
The merging companies are an excellent strategic fit
o Same core businesses and product lines
o Complementary geographical presence
o Parallel strategic intent
<PAGE>
[Slide 4]
WORLD'S LARGEST PAPER AND PAPER BOARD PRODUCERS 2000
[Bar graph representing the following information:
Capacity, million tons Paper Paper board
---------------------- ----- -----------
Stora Enso + Consolidated Papers 11.2 3.57
International Paper 7.1 6.6
New Champion 11.7 0.4
- ------------ ---- ---
Abitibi-Consolidated 7.2
Smurfit-Stone Container 0.1 7.1
Georgia-Pacific 3.2 3.6
Oji Paper 5 1.7
Nippon Group 4.9 1.7
Weyerhaeuser 1.9 3.8]
[Slide 5]
WORLDWIDE PRODUCT LINES - PULP AND PAPER
[Map showing production of Publication papers, Fine papers, Converting materials
and Chemical pulp in Europe, Asia, Africa, North America and South America as
follows:
<TABLE>
<CAPTION>
Publication papers Fine papers Converting materials Chemical pulp
<S> <C> <C> <C> <C>
Europe
UPM 5330 1950 850 2900
Champion
North America
UPM 460
Champion 740 1700 480 2790
South America
UPM
Champion 190 380 340]
</TABLE>
[Slide 6]
Strengths
o Global presence - production and sales
o Good long term customer relationships
o Efficient production capacity
o Economies of scale
o High level of vertical integration
o Integration of intellectual capital
<PAGE>
[Slide 7]
ACCRETION ANALYSIS
[Table stating the following information:
Market estimates for EPS (I.B.E.S.) in 2001
UPM-Kymmene USD 3.41
Champion USD 7.07
Champion
with synergy benefits of
USD 225 millions USD 3.76
Accretion USD 0.35
% 10.5%]
Merger will be earnings
accretive one year from
the closing of the deal
Source: Chase Securities, Inc.
[Slide 8]
Dividend Policy
On average over 1/3 of the profit for the period.
The aim is to provide shareholders with a steady, growing annual dividend.
Implied dividend of USD 2.50 per existing Champion share compared to USD 1.00
current plan
[Slide 9]
Deal structure
All stock deal
o Shared upside
o Reflects merger features
o Preserves the strong balance sheet
o Establishes a large US shareholder base
o Increases liquidity for shares
[Slide 10]
Pooling of interests
o Avoids goodwill
o Flexibility
o for rationalization and capacity management
o to sell listed shares
o Limitations for asset sales in the near future
o Treasury shares to be re-issued
(estimate: less than 3 million*)
o Share buy-backs not possible
*) press release Feb 22, 2000
<PAGE>
[Slide 11]
WORLDWIDE PRODUCT LINES - PULP AND PAPER
[Bar graph representing the following information:
<TABLE>
<CAPTION>
Publication papers Fine papers Converting materials Chemical pulp
<S> <C> <C> <C> <C>
Europe
UPM 5330 1950 850 2900
Champion
North America
UPM 460
Champion 740 1700 480 2790
South America
UPM
Champion 190 380 340]
</TABLE>
[Slide 12]
ACCRETION/ DILUTION 1)2)
[Table stating the following information:
% change in CHA New Champion % change to UPM
CHA2001 EPS 2001 EPS 2001 EPS stand-alone
+10% USD 7.77 USD 3.91 14.8%
I/B/E/S USD 7.07 USD 3.76 10.5%
- -10 % )3 USD 6.36 USD 3.62 6.2%
1) Based on 2001 synergies of USD 225 million
2) Based on stand-alone UPM 2001 EPS of USD 3.41; Mean I/B/E/S EPS estimate as
of February 10, 2000.
3) Mean I/B/E/S EPS estimate as of February 10, 2000
Source: Chase securities, Inc.]
