Rethinking Corporate Governance
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Rethinking Corporate Governance

The Forming of Operative and Financial Strategies in Global Corporations

Sven-Erik Sjöstrand

Rethinking Corporate Governance’s extensive and insightful empirical investigation offers a radically new approach to corporate governance. This ground-breaking volume describes and analyses the key nature-based and actor-based forces that ultimately determine corporate governance processes and long-term corporate paths. Generally, such forces work in complex and intricate interplays that to a large extent vary among corporations. The author argues that actions taken by individuals have a special status among those forces, as they not only generate impact in themselves, but also involve interpretations of the possible effects of all the other forces. Among those actions, the ones taken by the shareholders stand out as particularly decisive both for the governance processes as such and for how corporations develop over time.
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Chapter 9: From MoDo to Holmen: a conflictual merger process

Sven-Erik Sjöstrand


In the beginning of the 1980s, MoDo launched a new strategy for the whole company. It entailed an emphasis on its core businesses, that is to say, a ‘concentration path’ involving investments at Husum, disinvestments at Domsjö and Bureå, and the exploitation of economies of scale. Moreover, the further processing of basic resources was given priority, implying that the amount of pulp aimed for market sale had to be reduced. Regarding the hygiene business, the goal was to increase its capital base by acquiring Edet, Klippan and/or – preferably – Fiskeby (which had not yet been bought by Holmens Bruk). However, as MoDo was financially hampered, acquisitions of parts of companies were considered, too. An opportunity to buy companies and/or plants emerged at the end of the 1970s, when Ncb collapsed and was taken over by the Swedish state with the intent to restructure its operations (cf. Ch. 7). Ncb’s Hörnefors (sulphite pulp) and Köpmanholmen units (sulphate pulp and paper mill) were of particular interest to MoDo, which launched a joint investigation with the state to examine possible common development paths for Domsjö and Köpmanholmen, and to check whether a co-ordinated sourcing of timber to those units was possible. The study ended in an agreement that the two parties would build and jointly run a fine paper mill next to the Domsjö plant. Ncb, that is to say, the state, would be responsible for most of the investment costs and close down the pulp production at Hörnefors and Köpmanholmen.

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