SCA has delivered a binding offer to acquire Georgia-Pacific´s European tissue operations, with sales in 2010 amounting to EUR 1.25bn (SEK 11.9bn). The offered price is EUR 1.32bn (SEK 12.6bn). Georgia-Pacific´s acceptance of this offer is subject to consultations with works councils where appropriate.
“The deal is a strategic fit and will strengthen our product offering and geographic reach in Europe. It also leads to substantial synergies”, says Jan Johansson, President and CEO of SCA.
Georgia-Pacific’s European tissue operations have EBIT margins that are on a similar level as for SCA´s tissue business. The annual synergies are estimated at EUR 125m, with full effect in three years after closing. Related costs are estimated at EUR 130m. Already in year one the transaction is estimated to contribute to an increase of earnings per share and cash flow. With fully realized synergies earnings per share are expected to increase with approximately SEK 1.70.
SCA has received long-term committed credit facilities. The financing is within the Group´s target for debt/equity ratio.
Georgia-Pacific has a well-established presence in Europe in both away-from-home and consumer tissue products. Their products in both segments are in particular marketed with the well-known Lotus brand.
Consumer tissue accounts for some 60% of total sales and away-from-home tissue accounts for approximately 30% of sales. Personal care products such as cotton pads and facial cleansing wipes account for some 5%. In the consumer tissue business, close to 70% of sales are branded products and the remainder are private label products.
Georgia-Pacific’s European tissue operations have approximately 5,000 employees and 15 production sites in seven countries.
The transaction will be subject to customary consultation with employee representatives and will also be subject to approval by relevant competition authorities.
Invitation to telephone conference
Media and analysts are invited to a phone conference with Jan Johansson, President and CEO, Lennart Persson, CFO and Executive Vice President and Mats Berencreutz, Executive Vice President, today November 10th, 2011, at 09.00 CET. To participate, please call +44 (0) 1452 560 304 conference ID 27115031. Presentation material is available on www.sca.com.
Stockholm November 10, 2011
For additional information, please contact
Camilla Weiner, Senior Vice President, +46 8 788 5234
Pär Altan, Vice President Media Relations, +46 8 788 5237
Johan Karlsson, Vice President Investor Relations, +46 8 788 5130
NB
This information is such that SCA must disclose in accordance with the Securities Markets Act and/or the Financial Instruments Trading Act. The information was submitted for publication on November 10 at 08.00 CET.