SCA to pay Euro 39 million plus interest for an acquisition made in 1995

Jul 24, 2007. /Lesprom Network/. As stated in the annual report for 2006, over the past ten years there has been a dispute between the minority shareholders and SCA concerning the valuation of PWA at the time when the so-called control agreement was established in 1997. In October 2004 the court of first instance set the value at Euro 188.67 per share and the annual dividend at Euro 17.32 per share. The minority shareholders and SCA appealed this decision. On 23 July 2007 the final court of appeal (Oberlandesgerichts Munchen) issued a final decision on this issue whereby the value was set at Euro 231.60 per share and the annual dividend at Euro 16.20 per share. The effect of this court decision is that SCA must pay an additional purchase price of Euro 39 million (excluding interest, estimated at approximately Euro 17 million) for the shares acquired previously as well as an additional dividend of Euro 11 million (excluding interest). The remaining minority shareholders (3.4% of the shares in the company) are entitled during a two-month period after the decision to require SCA to redeem their shares for the value specified in the court decision, which for all outstanding shares corresponds to a purchase price of Euro 56 million. SCA's acquisition of the majority shareholding in 1995 was effected at a price corresponding to an EBITDA multiple of 4.5. The additional purchase price that now applies comprises 3.8% of SCA's total acquisition price for the shares. The additional purchase price, including interest, will be capitalized in the accounts as an acquisition cost. The additional dividend, including interest, will be reported as a dividend. Svenska Cellulosa Aktiebolaget (SCA) is a global consumer goods and paper company that develops, produces and markets personal care products, tissue, packaging solutions, publication papers and solid-wood products. Sales are conducted in some 90 countries. SCA has annual sales in excess of SEK 101 billion (Euro 11 billion) and production facilities in more than 40 countries. SCA had approximately 51 000 employees at the beginning of 2007. SCA shares are traded on the Stockholm, London and New York stock exchanges.