July 5 (Bloomberg) -- Svenska Cellulosa AB, Europe’s biggest tissue maker, will sell assets to win European Union approval for its 1.32 billion-euro ($1.65 billion) bid for Georgia-Pacific LLC’s operations in Europe.
The companies must sell a production facility and brands in the U.K. and Ireland, sell a factory in Sweden, and offer a license for Georgia-Pacific’s Lotus brand for the Netherlands, Belgium and Luxembourg to eliminate antitrust concerns, the European Commission said.
The U.K. and Irish divestments will remove the extra market share there that SCA may gain from the deal, the EU said. At the time of the announcement, SCA predicted it would bring its European market share to 35 percent for consumers and 30 percent in tissues sold to hotels and restaurants.
“The commitments offered by the parties will ensure that consumers do not face higher prices,” EU Competition Commissioner Joaquin Almunia said in a statement.
SCA expects to close the deal on July 20 and take control of Georgia-Pacific’s 15 plants and the Lotus brand, the company said in a statement. The purchase of Georgia-Pacific’s European operations from Koch Industries Inc. could add about 1.25 billion euros to sales for SCA, the maker of Tempo tissues and Libero diapers.
The divestments in the U.K. and Ireland will require the companies to sell off a production facility and a range of toilet paper and household brands, including Kittensoft and Inversoft, the EU said. They will also dispose of a plant making tissues for retailers’ store brands.
To resolve EU concerns about the Swedish market, the companies will sell one of their integrated paper-and-tissue production facilities, according to the EU statement.
For the Dutch market, they agreed to offer a license for the Lotus and Lotus Moltonel brands to a buyer who will re-brand the line. The license will also cover sales in Belgium and Luxembourg.
SCA separately sold its packaging business to DS Smith Plc in a deal approved by regulators in May.
To contact the reporter on this story: Aoife White in Brussels at firstname.lastname@example.org
To contact the editor responsible for this story: Anthony Aarons at email@example.com