Investing.com -- Shares of Stora Enso (HE: STERV ) rose more than 3% on Thursday following the company’s announcement on Wednesday that it had sold a 12.4% stake in its Swedish forest holdings for approximately €900 million.

The deal, which represents 175,000 hectares of its 1.41 million hectares in Sweden, is structured with a total enterprise value of €900 million and involves a new entity jointly owned by MEAG, Soya Group, and Stora Enso itself, which retains a 15% stake.

According to analysts at Jefferies, the price achieved for the stake was 5% to 8% above the book value of the Swedish forest holdings, which stood at €6.7 billion as of the first quarter of 2025.

They noted the premium was achieved despite restrictions associated with the transaction, including a 15-year wood supply agreement, with a potential 15-year extension.

The proceeds from the sale are expected to reduce Stora Enso’s net debt by €790 million upon completion, which is anticipated in the third quarter of 2025. Jefferies estimated that the deal will lower the company’s net debt-to-EBITDA ratio from 3.7x to 3.0x in 2025, even as earnings remain at cyclical lows.

Jefferies analysts described the move as strategically crucial  for Stora Enso, as it highlights the €10.36 per share value of the company’s Nordic forest assets on the balance sheet, well above the company’s current share price of €9.05.

They added that the transaction sends a positive signal to investors regarding the valuation and liquidity of European forest holdings, which are often priced at a discount.

Stora Enso will maintain long-term access to raw materials through the supply agreement and will continue to provide management services for the forest operations.

The structure of the deal and the valuation achieved were viewed by Jefferies as exceeding market expectations, especially given the prevailing macroeconomic uncertainty and earlier expectations that such a transaction might not materialize until the second half of the year.