Sweden-based hygiene and health company Essity AB has announced plans to divest its 50% stake in Turkish company SCA Yildiz to Yildiz, the joint venture’s other shareholder.
The transaction is expected to be completed during the second quarter of 2019. Financial details regarding the value of the transaction were not disclosed.
SCA Yildiz is primarily active in the manufacture of baby care products in Turkey. In 2018, the company generated total sales of approximately SEK 364 million.
Essity Expects Currency-Related Loss
According to a statement issued by Essity, the divestment is expected to result in a currency-related loss of approximately SEK 150 million. The loss will be recognized as an item affecting comparability in the company’s financial results for the second quarter of 2019.
Essity noted, however, that the transaction and associated currency-related loss will not have an impact on the company’s cash flow or shareholders’ equity.
The divestment represents a change in Essity’s involvement in Turkey’s baby care products market but does not signal the company’s withdrawal from the country.
Essity Maintains Operations in Turkey
Following the sale of its stake in SCA Yildiz, Essity said it will continue operating in the Turkish market through its wholly owned businesses.
The company’s remaining activities in Turkey include professional hygiene products, incontinence solutions and medical solutions, allowing Essity to maintain a presence in several important segments of the hygiene and healthcare market.
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The transaction enables Essity to exit its joint ownership position in SCA Yildiz while maintaining direct operations in other product categories.
Essity is an international hygiene and health company with operations across a broad range of personal care, professional hygiene and healthcare-related segments.
The planned divestment highlights the company’s ongoing management of its international portfolio while preserving its presence in Turkey through businesses that remain under its full ownership.
