According to Bloomberg News, Brazilian Suzano is in contention to buy shares in Chinese tissue manufacturer Vinda International. According to sources, the pulp producer is among those interested in the new round of bids for Essity’s majority share in the company. Altogether, the company is worth about US$2.7 billion.
The Swedish multinational’s share in Vinda is valued at around HK$9.8 billion (US$1.3 billion), based on August 4th closing price. According to sources, the owners are looking at trading the tissue manufacturer’s shares at around HK$20 per share. In this sense, potential buyers should evaluate financing opportunities.
In addition to Suzano, acquisition companies Bain Capital, CVC Capital Partners and DCP Capital would also have advanced in the process.
According to Bloomberg, Vinda’s founder and second-largest shareholder, Li Chaowang, is considering the possibility of partnering with an interested investor in the company after Essity announced the strategic review of its part of the organization in April. Given this, the sources point out that deliberations are ongoing and the owners may decide not to close an agreement.
Representatives of Bain, CVC and DCP, as well as Suzano and Vinda did not comment on the case.
According to Per Lorentz, vice president of corporate communications, the process is just beginning and Essity is far from having a final list.
HIGHER SHARE IN CHINA
If Suzano closes an agreement with Vinda, the company could expand its presence in the Chinese market, through a well-established company, while expanding its position as a supplier in the world’s second economy.
As the world’s largest pulp importer, China accounts for 43% of the commodity sold by the Brazilian producer. In May, the President of Suzano, Walter Schalka, said in an interview that he is considering selling his products to China with prices in yuan, reinforcing the signs that the dollar is beginning to lose dominance in the commodity markets.
Vinda operates in the Chinese hygiene and personal care market under the Tempo and Tork brands, as well as feminine care, baby care and incontinence items.