(Photo : Chinese Famous Brand Vinda)

In an attempt to widen its footprint in China, the world's second largest tissue market, Swedish paper and hygiene products producer Svenska Cellulosa Aktiebolaget (SCA) has offered a cash bid of HK$11 ($1.42) a share for Vinda International, the largest household paper company in China.

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SCA announced in Stockholm, Sweden that it intends to buy the share it does not yet own in Vinda as the company aims to further push its products into China. The Swedish company currently holds 21.7 per cent of Vinda and it made a public cash offer that values the Chinese company at $1.41 billion.

SCA President and CEO Jan Johansson said the Swedish company is particularly interested in Vinda because it is a strong player in the Chinese tissue market. Vinda has also demonstrated healthy growth and profitability.

Acquisition to Further Strengthen Vinda

Johansson said SCA intends to further strengthen Vinda and ensure its long term competitiveness not only in China but also in other global markets. He said SCA can make use of the existing distribution channels in China to further increase supply of Vinda products and bring the brand into other markets around the world.

Indeed, Vinda is a strong player in China's tissue market. Headquartered in Xinhui, Guangdong, the company produces tissue paper products carrying the "Vinda" brand, which has been recognized as one of China's famous brands.

In 2007, SCA first bought 21.7 per cent shares in Vinda, which gave it two seats in Vinda's Board of Directors. SCA, which has approximately 45,000 employees, benefited from its Vinda investments.  Vinda, which listed in the Hong Kong Stock Exchange, has more than 8,000 employees and posted sales of $750 million last year.

SCA said it has been granted a credit facility of $1.1 billion by JP Morgan Securities. The fund, it said, may be used to finance the offer if necessary.