The Consumer Tissue Private Label Europe division will remain part of hygiene and tissue group Essity Group.
In April 2023, Essity announced that it would initiate a review of this division in order to reduce the share of Consumer Tissue in the company's total sales revenues. The review was completed in December 2023 and concluded that the division was a competitive and value-creating part of the group as a result of the divisionalisation process.
Net sales in the Consumer Tissue Private Label Europe division totalled around SEK9.8bn (approx. €875m) in 2022. The division comprises a total of seven production facilities in Germany, Belgium, Italy and France with around 1,900 employees.
Sale of stake in tissue producer Vinda agreed
Essity has also announced its intention to sell its stake in the Chinese tissue manufacturer Vinda International Holdings to Isola Castle , a subsidiary of Indonesian pulp and paper producer Asia Pacific Resources International Limited (April). Essity currently holds a total of 51.59 per cent in Vinda.
Isola Castle declared in mid-December that it would submit an offer to Vinda to acquire all shares, according to reports. Essity supports the offer and has irrevocably committed to accept the offer for its stake. The amount of the offer corresponds to an equity value of Vinda of SEK37bn (approx. €3.3bn).
Essity expects to realise cash proceeds of SEK19bn (approx. €18bn) from the transaction. Closing is subject to regulatory approvals in China and other relevant markets and is expected for mid-2024.
Following the acquisition, Vinda will be offered an exclusive licence for the further marketing and sale of certain Essity brand products, replacing the existing licence agreement, the Swedish group writes.
"This is a very attractive offer for Essity and for our shareholders. We will maintain our presence in Asia and in Vinda by continuing to licence Essity's brands, with sustainability requirements for sourcing, production and collaboration in innovation and marketing," comments Essity CEO Magnus Groth.
