Sweden's Essity kicks off sale of majority stake in Hong Kong's Vinda - sources

Vinda International Holdings

16/05/2023 09:59

By Kane Wu
       HONG KONG, May 16 (Reuters) - Sweden's Essity
 ESSITYb.ST  has kicked off the sale process for its 52% stake
in Hong Kong-based Vinda International  3331.HK  - a maker of
tissues and diapers, two sources with knowledge of the situation
told Reuters.
    Bank of America, Essity's adviser on the sale, has sent
information to potential buyers including a number of private
equity funds, said one of the sources and a third person with
knowledge of the matter.
    The stake was worth $1.7 billion as of Tuesday's close.
    First-round non-binding bids are due by the end of June, one
of the sources said.
    Interested parties are looking at potential deal structures
and an offer for Essity's 52% stake could trigger a buyout of
the entire company, the sources said, although they added that
discussions are at a very early stage.
    The Swedish maker of hygiene products said last month it has
initiated a strategic review of its stake in Vinda as it wants
to reduce its consumer tissue division's share of group sales.
    An Essity spokesperson said the company is in the early
stages of the review and has nothing more to add at this point.
He declined to comment on what he called "market rumours".
    Vinda did not immediately respond to a request for comment.
    It said on Saturday that it had not received any update on
Essity’s strategic review, responding to media reports that Fu
An International Co Ltd, Vinda's second-largest shareholder with
a 21% stake, was seeking to buy Essity's holding.
    All sources declined to be identified as the information was
confidential. Bank of America declined to comment.
    Founded in 1985, Vinda's core business segments include
tissues, sanitary napkins and adult and baby diapers.
    It has 8 brands and 13 production bases, 10 of which are in
mainland China, according to the company's website.
    Vinda in 2022 accounted for 16% of Essity's 156 billion
Swedish crowns ($15.2 billion) turnover, while its private label
consumer tissue business in Europe represented 6%.
    

 (Reporting by Kane Wu; Editing by Edwina Gibbs)
 ((kane.wu@thomsonreuters.com; +85228436590; Reuters Messaging:
kane.wu.thomsonreuters.com@reuters.net))