There is big news this morning coming out of the international merger and acquisition sector. SCA, the company famous for Swedish paper and hygiene products just announced that they have agreed on terms to purchase American tissue maker Wausau Paper Corp.(NYSE:WPP). According to SCA the transaction is reported to be done in cash, and at the moment the deal is valued at a whopping $513 million. Sources close to SCA believe the deal was done to expand its wide variety of products and to gain international recognition.
SCA, has grown its hygiene division drastically since the company’s researchers realized that the hygiene market has a better outlook and turn around in the emerging markets. On this deal SCA is expecting to save annually nearly $40 million after three years. According to SCA’s statement this deal is already approved by both sides.
Financial analysts from several firms believe that Wausau is the real winner in this deal, the price which SCA is paying for Wausau represents a premium of over 40%. Though this deal has to be approved by shareholders and of course regulators both sides see no problem in the deal.
Due to the whole restructuring needed to complete the deal the first quarter seems like the period in which the deal would come to effect.