|September 14, 2016|
|Containing and removing tissue machine dust|
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SCA will Split into Two Listed Companies in 2017
The new hygiene company will receive a new name and be registered in Stockholm, and the forest products company will keep the name SCA.
In August 2015, SCA, Sweden, announced that, to further develop the company’s two operations, it had decided to initiate a dividing of the Group into two divisions—a hygiene division and a forest products division. “For the Annual General Meeting 2017, the Board of Directors plans to present a proposal for the distribution and listing of the company’s hygiene business,” said Pär Boman, chairman of the SCA Board of Directors.
“Our hygiene and forest products businesses are two strong operations with attractive offerings in their respective industries. After a thorough analysis, our conclusion is that a split of SCA into two listed companies is the best way to continue to create shareholder value, customer benefits, and further development opportunities,” noted Magnus Groth, president and CEO of SCA.
An evaluation, mainly based on value creation and flexibility for the shareholders, has been made of various methods and structural alternatives to achieve a complete split of the two businesses into two independent companies. The conclusion is that a distribution and listing of SCA’s hygiene business will create more shareholder value and incur relatively low transactional risk and relatively low transaction costs.
“It is the opinion of the board of directors that the proposal to split the hygiene and forest products businesses into two listed companies increases the ability for each business to successfully realize its strategies and increase value for SCA’s shareholders. It is also pleasing that the main shareholders will support the proposal at the Annual General Meeting,” said Boman.
“As a long-term asset manager and active owner in SCA, we share the company’s opinion that a dividing of the business creates value over time. It is a natural step in the successful streamlining towards the hygiene business and the forest products business conducted over several years,” added Helena Stjernholm, CEO, Industrivärden.
Prior to the Annual General Meeting 2017, the SCA Board of Directors plans to present a proposal for the distribution and listing of the Group’s hygiene business. The distribution is proposed to be made to the shareholders in proportion to their holdings of SCA’s Class A and Class B shares. The distribution is expected to meet the requirements of Lex Asea. If the shareholders decide in favor of the proposal, the plan is to distribute and list the new hygiene company on Nasdaq Stockholm during the second half of 2017.
Following a split, there will be two listed companies. One will be a hygiene company including SCA’s current business areas Personal Care and Tissue. The second will be a forest products company including all forest products operations and all the forestland owned by the SCA Group.
“SCA’s leading global hygiene business offers products that make life easier every day for millions of people around the world. An increasing awareness of the relationship between hygiene and health, combined with a growing and aging population, are creating greater demand for hygiene products. Furthermore, SCA is Europe’s largest private forest owner and the well-integrated supply chain, with production facilities concentrated in Sweden in close proximity to its forest holdings, offers significant synergies and competitive advantages. Forest Products is an efficient and well-invested business. Our investment in increased pulp capacity in the Östrand mill, one of the largest industrial investments in Sweden, will further strengthen our long-term competitiveness,” said Groth.
Effective immediately, SCA’s Directors appointed by shareholders and CEO Magnus Groth have, in addition to current assignments, also been appointed the board of directors and CEO of the parent company for the hygiene business. The intention is to appoint Ulf Larsson, current president of SCA Forest Products and a member of the Executive Management Team, CEO of the listed forest products company after the distribution of the hygiene business. In addition to his current assignments, effective immediately, the board of directors has also appointed Larsson executive VP of SCA.
The intention is that the new listed hygiene company receives a new name and is registered in Stockholm, and the forest products company keeps the name SCA and is registered in Sundsvall.
This item also appeared in the most recent Tissue360° newsletter and is being shared here for Ahead of the Curve readers who may have missed it.
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