Following the transaction, paper giant UPM will have 91% ownership in the Fray Bentos pulp mill and 100% in Forestal Oriental, subject to completion in 2010.
UPM said the impact of the deal would make it "a significant pulp producer" and it expects this to have a positive impact on its 2010 results.
Tapio Korpeinen, president of UPM's energy and pulp business group, said: "Our production capacity will increase from 2.1m tonnes to 3.2m tonnes a year, with approximately one third being eucalyptus pulp.
"The share of plantation-based hardwood pulp in UPM's production will increase significantly and the ownership of the Uruguayan plantation operations will increase our self-sufficiency in fibres."
Construction of the Fray Bentos pulp mill began in 2005 and production started in November 2007.
Prior to the transaction, UPM accounted for about half of the mill's 1.1m-tonne capacity. The Fray Bentos pulp is used mainly in UPM's paper mills in China and Europe.
