M-real Corporation Stock Exchange Release on 22 October 2009 at
8:30
am

M-real Corporation, a part of Metsäliitto Group, announced on 15
July
2009 that its associated company, Oy Metsä-Botnia Ab, and its
owners,
M-real, Metsäliitto Cooperative and UPM-Kymmene Oyj, have signed
a
letter of intent regarding the new ownership structure of
Metsä-Botnia and
the divestment of Metsä-Botnia's Uruguayan
operations to UPM. The master
agreement regarding this transaction
was signed on 22 October 2009.

Pursuant
to the agreement, Metsä-Botnia will sell all its holdings in
Uruguayan
operations to UPM. The agreed total value of the pulp mill
and forest assets in
Uruguay is approximately EUR 1.6 billion. In
addition, Metsä-Botnia will sell
77 per cent of its holding in
Pohjolan Voima Oy to UPM for a consideration of
EUR 66 million.
Concurrently, Metsä-Botnia will distribute dividends and
capital
repayments to its shareholders, of which M-real's share is about
EUR
300 million.

Pursuant to the agreement, Metsä-Botnia will acquire its own
shares
from UPM and will cancel them. As a result, M-real's ownership
in
Metsä-Botnia increases by 3.0 percent-units. M-real and
Metsäliitto
Cooperative have agreed that Metsäliitto Cooperative will
acquire
such 3.0 per cent holding of Metsä-Botnia from M-real. The agreed
total
value of Metsä-Botnia without its Uruguayan operations and
Pohjolan Voima Oy
shares is approximately EUR 1.9 billion.
Metsäliitto Cooperative will pay its
share purchase from M-real with
a market priced vendor note of EUR 50 million,
having a maturity of 3
years.

Upon the closing of the transaction, M-real will
change the
consolidation method of Metsä-Botnia in its consolidated
financial
accounts and process its ownership in Metsä-Botnia as an
associated
company according to IAS 28. When closed, the transaction will
reduce
M-real's net debt compared to the end of the second quarter in 2009
by
approximately EUR 550 million when taking into account the cash
consideration
of EUR 300 million, the market priced receivable of EUR
50 million from
Metsäliitto and the change in the consolidation
method for the consolidated
financial statements of M-real. M-real
will use the funds for paying off its
debts. The transaction will not
have a significant impact on M-real's equity.
The closing of the
transaction and the change in the consolidation method
of
Metsä-Botnia are estimated to decrease M-real's annual sales
by
approximately EUR 250 million and to slightly improve the result
before
taxes compared to the first half of 2009.

"Concentrating Metsä-Botnia's
production to Finland supports M-real's
strategy in its packaging business. As
a result of the divestment of
the Graphic Papers business eucalyptus pulp is no
longer an important
raw material for M-real. In addition, the transaction will
decrease
net debt and pulp surplus of M-real," says Mikko Helander, CEO
of
M-real.

The transaction is still subject to the conclusion of
negotiations
with financing parties and approvals by competition authorities.
The
transaction is expected to be completed latest during the first
quarter of
2010. After the closing of the transaction M-real owns 30
per cent, Metsäliitto
Cooperative 53 per cent and UPM 17 per cent of
Metsä-Botnia.

The Board of
Directors of M-real has reviewed and approved the
transaction without those of
its members who are dependent on
Metsäliitto Cooperative. Upon request of the
Board of Directors of
M-real, Handelsbanken Capital Markets has issued a
Fairness Opinion,
according to which the transaction is financially fair from
the point
of view of M-real's shareholders. Castrén & Snellman
Oy,
Attorneys-at-law, has acted as the company's legal advisor.

For further
information, please contact:

Matti Mörsky, CFO, tel. +358 10 465 4913
Juha
Laine, Vice President, Investor Relations and Communications,
tel. +358 10 465
4335