STOCKHOLM, Sweden (From news reports) -- A group of private equity companies have bid around 200 billion Swedish crowns ($22.3 billion) for the hygiene arm of tissue and forestry products firm SCA, Swedish daily Dagens Nyheter said, citing unnamed sources.
Sweden's SCA last week formally approved a proposal to split into two listed units, a hygiene products firm, called Essity, and a forestry company carrying the SCA name.
SCA has said it aims to list Essity as soon as possible, and during the second half of 2017 at the latest.
"At least two private equity companies together have bid around 200 billion crowns for the hygiene unit," Dagens Nyheter said in a report that first appeared on its website on Wednesday night. The newspaper did not name the private equity firms.
Dagens Nyheter said the bid had been made a few weeks ago.
The firm, which counts U.S. firms Procter & Gamble and Kimberly-Clark among its main rivals, declined to comment when contacted on Thursday.
SCA's hygiene business is the world's largest maker of incontinence pads and the second largest in consumer tissues such as napkins and toilet paper. Its forestry arm produces paper, pulp and wood products.
Last year, SCA's hygiene business accounted for 86 percent of the group's total sales.
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% of the Group's net sales and the forest products business for approximately 14%. Synergies between the operations have diminished over time.
Today, SCA owns 2.6 million hectares of forest in Northern Sweden, an area corresponding to about 5% 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 including TENA for incontinence products and Tork for Away-from-Home tissue, and under other well-known regional brands, such as Libero, Libresse, Lotus, Nosotras, Saba, Tempo, Vinda and Zewa. With the acquisition of BSN medical, a leading medical solutions company, Essity is further strengthening its capabilities in the health arena with brands such as Leukoplast, Cutimed, JOBST, Delta Cast, Delta Lite and Actimove.
"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," says Magnus Groth, currently President and CEO of SCA and future President and CEO of the new hygiene and health company Essity.