Investment AB Kinnevik has received regulatory approval for its previously announced agreement to sell its Korsnas packaging operations to Billerud for SEK2.7bn ($406m), to form a merged group called BillerudKorsnas.

According to the investment firm, the approval was received from European Union and all relevant conditions have been met. The deal is planned to close on 29 November 2012.

In June 2012, Kinnevik signed an agreement with Billerud regarding a combination between Korsnäs and Billerud, which was subject to the approval of the shareholders of Billerud and customary approvals from relevant competition authorities.

The commission's decision to approve the merger is conditioned upon the sale of a paper machine at the production unit in Gävle (PM2).

The sales of white kraft and sack paper products manufactured at PM2 amounted to 2% of the new group's total combined sales volume for 2011.

Besides, BillerudKorsnäs will offer to supply certain inputs such as pulp, steam and electricity to the paper machine, for a certain time period following the divestiture.

In the new company BillerudKorsnas Kinnevik will have an ownership stake of 25%.