STOCKHOLM (Reuters) - Swedish paper and hygiene products maker SCA (SCAb.ST) said on Tuesday it had agreed to buy U.S. tissue maker Wausau Paper Corp (WPP.N) for $513 million in cash, in another step to focus on products ranging from tissues to incontinence protection.
SCA, Europe’s biggest private forest owner, has grown its hygiene product operations to around 85 percent of group turnover, betting on a market that is less cyclical and has a better outlook, especially in emerging markets, than paper.
SCA expects the acquisition of the maker of tissues, soap and dispensing systems for non-domestic settings such as offices to generate annual cost savings of around $40 million after three years. Restructuring costs would total around $50 million, it said in a statement.
SCA's shares were up 1.7 percent at 0721 GMT, outperforming Stockholm's blue-chip index .OMXS30.
SCA said the boards of both companies approved the deal, whose price tag represents a premium of 40.6 percent to Wausau Paper’s closing price on Monday.
It expects to close the deal, which is subject to Wausau Paper shareholder and regulatory approvals, in the first quarter of 2016.
Reporting by Anna Ringstrom, editing by Louise Heavens