Vinda International stake changes hands: Essity pulls out, Golden Eagle Group takes over

Vinda International's earnings are not doing well, and its major shareholders are no longer willing to continue to wait patiently.

At the end of 2023, Vinda International announced that its major shareholder, Essity of Sweden, had begun discussions with several potential buyers for the sale of its shares in Vinda International.

Recall that in 2013, Essity acquired nearly 300 million shares of Vinda International for a consideration of approximately HK$8.648 billion, thereby becoming the controlling shareholder of the company.

Essity is the number one manufacturer of consumer paper products in Europe and number two in the world, with globally recognized brands such as TENA and Tork. Vinda International has been able to expand its brand portfolio and product line through this partnership, and has utilized the Tempo brand to penetrate the high-end market.

Essity's decade-long controlling position has not seen any significant share increases or decreases in recent years, with a current shareholding of approximately 51.59%.

The reason for Essity's divestment idea may be related to its own operational challenges. Financial reports show that Essity's profits have continued to fall over the past few years, dropping even more than 35% in 2022, and net profit margins have fallen from 7.07% to 3.56%.

It is lamentable that it is not only the major shareholders who want to sell their stakes, but even the founding family has chosen to sell their shares and cash out to leave.

Vinda's predecessor was a daily necessities factory located in Xinhui, Jiangmen, Guangdong, where Li Chao-wang became the new factory manager in 1985, at the age of 27. Under his leadership, the daily necessities factory turned a loss into a profit and gradually became a leading company in the industry.

By 1990, Li Chao Wang registered the Vinda trademark and developed a small-package tissue paper program. Through massive advertising campaigns, Vinda gradually became a well-known brand and sales surged. 2007, Vinda was listed on the Hong Kong Stock Exchange, and on that day, the stock price soared 39%, raising nearly HK$1.3 billion.

With major shareholders and founders cashing out, many potential buyers have shown strong interest in taking over Vinda International. On December 15 last year, Vinda International announced that Chen Jiang, a wealthy Indonesian-Chinese businessman, and Asia-Pacific Resources Group, a subsidiary of his family trust, offered to buy Essity and Li Chao Wang's shares in Vinda International at a price of HK$23.50 per share. The price was 13.53% higher than the closing price of Vinda International on the previous trading day, and the total transaction amounted to HK$26.1 billion.

Asia Pacific Resources Group is understood to be one of the world's largest producers of pulp and paper products and a core subsidiary of Indonesia's heavyweight consortium Golden Eagle Group. This means that the controlling shareholder of Vinda International will change from Essity to Golden Eagle Group.

Industry analysts believe that the Golden Eagle Group, as a giant in the paper industry, may in the future take advantage of its resources to integrate and thus create synergies for the company's future development.

Source:Yangtze River Business News