Thursday 25th March 2004 |
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The agreement is conditional on normal regulatory consents from the Overseas Investment Commission (OIC) and Foreign Investment Review Board (FIRB), with the sale completion date expected to be effective mid May.
The agreement comes after CHH's November 2003 announcement to explore alternatives for its tissue business which comprises the Consumer Brands, Experko and Treasures Babycare businesses. The agreement also includes Sancella, a joint venture which manufactures and markets the successful Libra and TENA brands.
CHH chief executive Peter Springford said a key driver for the
decision was maximising shareholder value and finding the right ownership option for Tissue.
"From the outset we recognised CHH Tissue was a well positioned and maintained business with exceptional brands and a strong market presence. We are delighted with the outcome and the opportunities the new owner can provide CHH Tissue and Sancella employees.
"With a strong international focus in the hygiene products market, SCA has the capacity and resources to develop the offerings of the tissue and Sancella businesses, helping these businesses to further realise their potential. For SCA, the acquisition delivers strong synergies and value by building on their presence in the important Australasian market,"
Springford said.
CHH is in a very strong financial position with a debt to total
capitalisation ratio of better than 20%. Taking into account the
optimal capital structure and future cash flow, CHH has decided it will distribute approximately half the proceeds but in any event not less than $450 million by way of share buy back, pro rata to all shareholders.
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