SWEDEN: SCA Announces Plans To Split Into Two Companies

SCA has announced plans to split into two companies, a move that will create separate publicly-listed entities for its Hygiene and Forests businesses.

SCA’s hygiene unit – which owns brands such as Libero, Libresse, Nosotras, Saba and TENA – is the world’s largest maker of incontinence pads and No.2 in consumer tissues such as napkins and toilet paper. The unit accounts for 85% of its sales.

The group said it will spin off the unit to “create more shareholder value and incur relatively low transactional risk and relatively low transaction costs”.  It plans to list the business in the second half of 2017, under a new name.

Last year, the group had announced plans to merge forest land and forest products businesses into one division.  SCA is Europe’s biggest private owner of forests, and its forestry arm produces paper, pulp and wood products.

NAM Implications:
  • A logical split, given radically different business models and tax structures.
  • Leaving 85% of the business to focus on core FMCG marketing.
  • Time for members of the tissue-based category to reassess the new competitive landscape?