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SCA to acquire Georgia-Pacific European tissue operations10th of November 2011
SCA has delivered a binding offer to acquire Georgia-Pacific's European tissue operations in a deal worth 1.32 billion euros. Georgia-Pacific´s acceptance of this offer is subject to consultations with works councils where appropriate.
Georgia-Pacific’s European tissue operations have EBIT margins that are on a similar level as for SCA´s tissue business. The annual synergies are estimated at 125 million euros, with full effect in three years after closing. Related costs are estimated at 130 million euros. From year one the transaction is estimated to contribute to an increase of earnings per share and cash flow.
Georgia-Pacific markets its products across Europe under the Lotus brand, with consumer tissue accounting for 60 per cent of total sales, and 30 per cent in the away-from-home sector. The rest of the company's turnover is in personal care products.
Its European tissue operations employ around 5,000 people and there are 15 production sites in seven countries.
The transaction will be subject to customary consultation with employee representatives and will also be subject to approval by relevant competition authorities.
“The deal is a strategic fit and will strengthen our product offering and geographic reach in Europe. It also leads to substantial synergies”, says Jan Johansson, president and ceo of SCA.