SCA has offered EUR 1.32 billion to acquire Georgia-Pacific's European tissue business. The acquisition is expected to increase SCA's earnings per share in the first year and by approximately SEK 1.70 with fully realized synergies. The acquisition would create a leading European tissue company and strengthen SCA's product offering, geographic reach, and presence in key markets and the AFH tissue industry. Substantial synergies of EUR 125 million are expected from improved supply chain efficiency and SG&A, enhancing tissue EBIT margins by 2-2.5 percentage points within 3 years.
SCA delivers binding offer to acquire Georgia-Pacific´s European tissue operations
1. Binding offer for Georgia-Pacific’s
European tissue business
Jan Johansson, President and CEO
1 November 2011
2. Binding offer for Georgia-Pacific’s
European tissue operations
Offered price: EUR 1.32bn
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 approx. SEK 1.70
Georgia-Pacific´s acceptance of this offer is subject to
consultations with works councils where appropriate
The transaction will be subject to customary
consultation with employee representatives and will
also be subject to approval by relevant competition
authorities
2 November 2011
3. Binding offer for Georgia-Pacific’s
European tissue operations
Creates a leading European tissue company
Strengthens our product offering and
geographic reach in Europe
Enhances our presence in key markets
Good strategic fit in AFH tissue
Substantial synergies
Increased share of branded sales in
our consumer tissue portfolio
3 November 2011
4. Georgia-Pacific’s European tissue
operations
Sales: EUR 1.25bn*
Consumer tissue, approx. 60%
AFH tissue, approx. 30%
Personal care, approx. 5%
EBIT margins on similar level as SCA’s tissue business
Market positions
Consumer tissue, 11% market share
AFH tissue, 10% market share
Well-known Lotus brand for AFH tissue and
consumer tissue
Approx. 5,000 employees
15 manufacturing sites in 7 countries
670,000 tonnes annual tissue capacity
* Italy and Turkey are not included in the binding offer
4 November 2011
5. Substantial synergies
Increased supply chain efficiency
Optimization of logistics
More efficient sourcing
Improved SG&A and A&P efficiency
Annual synergies: EUR 125m
Improves Tissue EBIT margins by
2-2.5 percentage points
Full effect in 3 years after closing
Related costs: EUR 130m
5 November 2011
6. Enhances SCA’s presence
In both Consumer tissue and AFH tissue
European Consumer tissue market
25% SCA SCA and GP
35%
European AFH tissue market
SCA and GP
SCA
19% 30%
6 November 2011
7. Increased share of branded sales
In Consumer tissue
SCA’s Consumer tissue sales
SCA SCA and GP
Retailers’
Branded brands Branded
Retailers’ 40% 50%
brands
7 November 2011