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SCA to Sell UK/Ireland Corrugated Busniness to SAICA

June 20, 2008 - SCA said that it has signed an agreement to sell its UK and Ireland conventional corrugated business to Spain's SAICA for GBP 100 million (EUR 125 million) in an all cash deal. About 1,800 people are currently employed in these operations.

The divested business has annual sales of approximately GBP 240 million (EUR 300 million), SCA said.

SCA said it will focus on specialized packaging in its operations in the UK and Ireland.

"The European packaging market is in great need of consolidation," Jan Johansson, president and CEO of SCA. "SCA’s focus is on increasing value added parts of the packaging business and also on creating growth in the Eastern part of Europe, while consolidating our existing operations in Western Europe. We carry through today’s deal as the investment required to rebuild a competitive position in the segments we divest is not justified, given our chosen strategy."

The deal is subject to regulatory approval, and SCA expects the sale to be completed during the third quarter this year.

In addition, a supply agreement has been signed, whereby SCA will supply kraftliner at today’s volumes to SAICA over a five-year period and for testliner over a three year period.

SCA also announced its intention to close its New Hythe containerboard mill (testliner and fluting) with a capacity of 240,000 tons by mid-2010, saying that the company's new focus doesn´t require local paper production.

SAICA is a privately owned Spanish paper and packaging company with sales of approximately EUR 1,600 million. SAICA operates paper mills and corrugated facilities in a number of European countries, including the UK.

SOURCE: SCA




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