Sweden: SCA to split into two companies
Svenska Cellulosa Aktiebolaget (SCA), the Swedish manufacturer of paper products, is to split in two.
The first of the two new companies will be a forest products company that will retain the SCA name, while the second, called Essity, will be a hygiene and health company. Following the split, Essity will develop, produce and sell personal care and tissue products. According to SCA, the name Essity stems from the words ‘essentials’ and ‘necessities’, in line with the firm's mission to offer "everyday necessities".
The decision to split the group was taken by the firm's shareholders after voting to approve a proposal from the board. According to the firm, the shareholders will receive shares in Essity, the newly listed hygiene and health company, in addition to their existing shares in SCA,
"I am pleased that the shareholders support the Board’s proposal regarding two separate listed companies", commented Magnus Groth, president and CEO of SCA and future president and CEO of Essity. "This will increase value for shareholders in the long-term through increased focus, customer value, development opportunities and enables each company to successfully realize its strategies. We look forward to an exciting future for our two strong listed companies".
The split will be carried out no later than the second half of 2017.