SCA buys P&G assets

PPI, Nov 2007

EUROPE

SCA has completed the takeover of Procter & Gamble's (P&G) European tissue operations. The European Commission approved the move in September.

The purchase price has been set at Euro 512 million ($728 million). The first payment of Euro 329 million was made in cash upon closure of the deal. The remaining Euro 183 million will be paid following agreed technical adjustments at some of the acquired plants, which are expected to be completed during the first half of 2008. SCA will purchase the volumes delivered from these facilities until then.

"We don't know which plants these will be yet since we didn't have access to them until now," a spokesperson said. "It's now that we can start working with the plants, the products and the brands."

The Commission's approval was conditional on SCA divesting its handkerchief operations under the Softis brand in Germany and Austria, including related production facilities, converting lines and sales and marketing personnel if the potential purchaser requires it.

SCA may also sell off the Softis handkerchief brand in some other countries, mainly central and eastern Europe, to enhance the viability of the divested business. The firm will look to sell off the assets now that the P&G deal has been wrapped up.

The acquisition includes P&G's five production sites in Europe. The facilities are located in Manchester (70,000 tonnes/yr of tissue), UK, in Witzenhausen (24,000 tonnes/yr) and Neuss (94,000 tonnes/yr), Germany, in Orleans (30,000 tonnes/yr), France, and in Lucca (25,000 tonnes/yr), Italy.

The deal also includes the acquisition of P&G's Tempo brand, a market leader in paper handkerchiefs in western Europe and Hong Kong. SCA has also obtained an exclusive license in Europe to use the Bounty and Charmin brands for kitchen rolls and toilet tissue, respectively.