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SCA to become two listed companies as shareholders approve split

SCA is to become two listed companies, the forest products company SCA and the hygiene and health company Essity, as shareholders voted in favour of the Board of Director’s proposal to split the Group into two listed companies.

SCA’s pulp mill in Östrand, Sweden, produces chemical-thermo-mechanical pulp (CTMP) and chlorine-free, bleached softwood kraft pulp (photo courtesy SCA).

SCA’s pulp mill in Östrand, Sweden, produces chemical-thermo-mechanical pulp (CTMP) and chlorine-free, bleached softwood kraft pulp (photo courtesy SCA).

Sweden-headed forest industry major SCA is to be split into two listed companies: the forest products company SCA and the hygiene and health company Essity as shareholders at the Annual General Meeting (AGM) held April 5 voted in favour of the Board of Director’s proposal to split the Group into two listed companies.

One of these will continue to operate as SCA, an efficient and well-invested forest products company that will include the forest products operations and all forest land currently owned by the Group. SCA’s hygiene business, including the current business areas of Personal Care, including the recently acquired BSN medical, and Tissue will become a leading global hygiene and health company operating under the name Essity.

The split of the company will be carried out at a suitable time following completion of the listing process, but no later than in the second half of 2017. In addition to their existing shareholding, SCA’s shareholders will also receive shares in the newly listed hygiene and health company Essity in connection with the listing.

– I am pleased that the shareholders support the Board’s proposal regarding two separate listed companies. This will increase value for shareholders in the long-term through increased focus, customer value, development opportunities and enables each company to successfully realize its strategies. We look forward to an exciting future for our two strong listed companies, said Magnus Groth, currently President and CEO of SCA and future President and CEO of the new hygiene and health company Essity.

Decreased synergies

SCA was founded in 1929 as a forest products company operating in Sweden. Over the years, the company expanded geographically and into other business activities, such as paper products production, personal care, consumer tissue and Away-from-Home tissue. In 2016, the hygiene business accounted for approximately 86 percent of the Group’s net sales and the forest products business for approximately 14 percent. Synergies between the operations have diminished over time.

Today, SCA owns 2.6 million hectares (ha) of forest in Northern Sweden, an area corresponding to about 5 percent of Sweden, making it the largest private forest holding in Europe. With this unique resource as the foundation, SCA has developed a well-invested, resource-efficient industrial operation, designed to generate the highest possible value from the forest using all parts of the tree. The forest products business produces solid-wood products, pulp, kraftliner, publication papers and renewable energy.

Following the split, Essity will be a leading global hygiene and health company that develops, produces and sells personal care and tissue products. Essity stems from the words ‘essentials’ and ‘necessities’, a fitting name for the products the new hygiene and health company offers – everyday necessities. Essity’s vision is; dedicated to improving well-being through leading hygiene and health solutions.

Sales are conducted in approximately 150 countries under globally leading brands.

– Hygiene and health are necessities for better lives and our products and solutions play an essential role in improving well-being for people around the world, said Magnus Groth, currently President and CEO of SCA and future President and CEO of the new hygiene and health company Essity.

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