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Offer Announced from APRIL for 100 Percent of the Shares in Essity’s Subsidiary Vinda

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Isola Castle Ltd, a company indirectly wholly owned by Asia Pacific Resources International Limited (APRIL), has today announced that it will make a pre-conditional public offer to the shareholders of Vinda International Holdings Limited (Vinda) to acquire 100 percent of the shares in Vinda for a price per share of HKD 23.50. Essity supports the offer and has signed an irrevocable undertaking to accept the offer in respect of all of its 51.59 percent shareholding in Vinda. The price in the public offer will correspond to an equity value of Vinda of approximately HKD 28.3bn (SEK 37.3bn).

The transaction is expected to generate cash proceeds to Essity of approximately HKD 15bn (SEK 19bn).

An exclusive license to continue to market and sell certain Essity branded products will be offered to Vinda after closing of the transaction to replace the existing license agreement.

“This is a very attractive offer for Essity and for our shareholders. We maintain a presence in Asia and in Vinda through continued licensing of Essity's brands, with sustainability requirements for sourcing, production and collaboration in innovation and marketing. After completion of the bid, we will also reduce Consumer Tissue's share of Essity's total sales and enable increased focus on investments and growth in Essity's brands and higher yielding categories," says Magnus Groth, president and CEO of Essity.

Essity’s ownership of 51.59 percent in Vinda has been consolidated 100 percent by Essity since 2014. Vinda is listed on the Hong Kong Stock Exchange and had a market capitalization of approximately HKD 25bn (SEK 33bn) at the end of trading on December 14, 2023. Vinda’s net sales in 2022 amounted to approximately SEK 25.1bn and EBITA amounted to approximately SEK 1.1bn. Of Vinda’s net sales, 83 percent were related to tissue and 17 percent were related to personal care.

As of Q4 2023, Essity will classify the financial reporting of Vinda as discontinued operations. Essity will shortly provide updated comparable figures. Essity’s financial targets for annual sales growth and adjusted ROCE will be reviewed as a consequence of this transaction. After legal consultation Essity has concluded that a divestment of its shares in Vinda, where Essity remains with its business through brands, technologies and innovations, and licensed sales, does not constitute cessation of business under Essity’s EMTN program.

The launch of the offer and completion of the transaction are subject to approval by regulatory authorities in China and other relevant markets. The transaction is expected to be completed mid-2024.

 

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