Sweden's Essity has kicked off the sale process for its 52% stake in Hong Kong-based Vinda International – a maker of tissues and diapers, two sources with knowledge of the situation told Reuters.
Bank of America, Essity's adviser on the sale, has sent information to potential buyers including a number of private equity funds, said one of the sources and a third person with knowledge of the matter.
The stake was worth $1.7 billion (€1.6 billion) as of Tuesday's close.
First-round non-binding bids are due by the end of June, one of the sources said.
Interested parties are looking at potential deal structures and an offer for Essity's 52% stake could trigger a buyout of the entire company, the sources said, although they added that discussions are at a very early stage.
The Swedish maker of hygiene products said last month it has initiated a strategic review of its stake in Vinda as it wants to reduce its consumer tissue division's share of group sales.
'Early Stages Of The Review'
An Essity spokesperson said the company is in the early stages of the review and has nothing more to add at this point. He declined to comment on what he called "market rumours".
Vinda did not immediately respond to a request for comment.
It said on Saturday that it had not received any update on Essity’s strategic review, responding to media reports that Fu An International Co Ltd, Vinda's second-largest shareholder with a 21% stake, was seeking to buy Essity's holding.
All sources declined to be identified as the information was confidential. Bank of America declined to comment.
Founded in 1985, Vinda's core business segments include tissues, sanitary napkins and adult and baby diapers.
It has eight brands and 13 production bases, 10 of which are in mainland China, according to the company's website.
Vinda in 2022 accounted for 16% of Essity's SEK 156 billion (€13.8 billion) turnover, while its private-label consumer tissue business in Europe represented 6%.
Read More: Essity Explores Sustainable Tissue Production With Voith
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