SCA streamlines business with sale of packaging operations

SCA is to increase the focus on its hygiene business through the divesture of its packaging operations to DS Smith.

The company will be selling off the business for a price of 1.7 billion euros (1.42 billion pounds), excluding its two kraftliner mills in Sweden, which are well-integrated into SCA's forest products operations.

Completion of the deal remains subject to European regulatory approval and ratification from DS Smith shareholders, but the companies expect the transaction to close during the second quarter of 2012.

Jan Johansson, president and chief executive officer of SCA, said its packaging business has been developed over the course of several years and is now being sold off to a buyer that is able to support its future growth.

"The reason for the divestment is primarily to enable increased growth in the hygiene business," he added.

In November 2011, the company reorganised its hygiene operations into three separate units, with the aim of improving efficiency and market presence.