Vinda International Changes Ownership: Golden Eagle Group Strongly Enters the Asian Household Paper Industry
On the evening of March 11, Vinda International announced that at 4:30 PM on March 11, 2024 (Monday), it had received valid acceptance of the offer from EssityGH for all its approximately 621 million shares, accounting for about 51.59% of the company’s issued share capital as of the announcement date. As a result, the conditions of the offer have been met. This signifies that the Golden Eagle Group of Singapore, through its Asia Pulp & Paper Group, has acquired Vinda International at HK$23.5 per share, fulfilling all the preconditions listed in the offer, which is now declared unconditional. This marks the official entry of Vinda International into the “Golden Eagle” era.
The acquisition is valued at HK$26.1026 billion, approximately US$3.342 billion, making it the largest equity transaction in the Chinese paper industry to date and potentially the largest fast-moving consumer goods (FMCG) merger and acquisition deal in the Asia-Pacific region this year.
Despite being a leader in the paper industry, Vinda International’s net profits have been less than ideal over the past two years, due to the impact of raw material costs like pulp. The substantial investment by Singapore’s Golden Eagle Group has garnered industry attention. Insiders believe that with the support of Golden Eagle Group, Vinda is expected to accelerate its expansion, potentially changing the competitive landscape long maintained by China’s four major household paper companies: Hengan Group (Hearttex), Vinda Paper (Vinda), C&S Paper (Charm), and Zhongshun Jierou (C&S).
Asia Pacific Resources International Limited (APRIL), one of the world’s largest producers of pulp and paper products, is backed by the patriotic overseas Chinese leader Chen Jianghe and his founded Golden Eagle Group in Singapore. The latter has a significant presence in pulp and paper, cellulose fibers, and special cellulose, making it a renowned upstream enterprise globally.
With this transaction, Vinda, a downstream paper company, will synergize with the upstream Asia Pacific Resources International Limited (APRIL), enhancing its competitive edge in the Asia-Pacific paper industry.
This transaction, which took nearly a year to complete, is one of the most closely watched in the household paper and broader consumer goods industries.
In April 2023, Essity, Vinda International’s controlling shareholder and a Swedish personal care manufacturer, announced a strategic review to reduce its consumer tissue business ratio, potentially selling its Vinda stake and European private brand consumer tissue business.
Essity’s collaboration with Vinda International dates back to before Vinda’s 2007 IPO, with Essity’s parent company, Asaleo Care, investing in Vinda and subsequently increasing its holdings, becoming the controlling shareholder in 2013 with a 51.59% stake.
Vinda International, one of China’s top household paper companies, leads in market share and brand recognition. According to Kantar Worldpanel data, Vinda’s market share in China’s mainland household paper market has ranked first for nine consecutive years from 2015 to 2023. Despite pressure on net profits in recent years, Vinda remains a quality asset in the capital market’s household paper sector. However, facing challenges from rising raw material costs and competition, Vinda has been working on integrating the supply chain and strengthening its industry voice.
On December 15, Vinda announced that Isola Castle Ltd proposed to acquire all Vinda shares at HK$23.50 per share. After the transaction, IsolaCastleLtd will hold about 72.62% of Vinda’s shares, with Essity no longer holding any Vinda shares.
Isola Castle Ltd’s parent company is Asia Pacific Resources International Limited (APRIL), a leading global integrated forest-pulp-paper manufacturer with an annual production capacity of 2.8 million tons of pulp and 1.15 million tons of paper. APRIL, along with the world’s largest cellulose producer Sateri and Asia’s first integrated forest-pulp-paper manufacturer APR, belongs to Singapore’s Golden Eagle Group.
By acquiring over 80.32% of Vinda’s shares, Asia Pacific Resources International Limited (APRIL), if it purchases at least 90% of the offered shares within the next four months, will proceed with a mandatory acquisition of the remaining shares. Upon completing this, Vinda will become a wholly-owned subsidiary and will apply to delist from the Hong Kong Stock Exchange.
This transaction demonstrates the strategic intentions of both the household paper company and the resource group, highlighting their cooperation in the face of global economic cycles impacting raw material prices, especially pulp. Despite efforts in innovation and product diversification to combat industry challenges, Vinda and other domestic leaders have faced declining operating profits due to overall industry conditions.
China’s household paper industry, reliant on pulp imports, faces pressure during international price surges. Since November 2020, pulp prices have risen, peaking early in 2023 and slightly declining by year-end.
Golden Eagle Group’s acquisition of Vinda is expected to help control costs and strengthen industry influence, given its global operational background.
The acquisition underscores Golden Eagle Group’s confidence in China’s market potential, with founder Chen Jianghe expressing optimism about China’s economic resilience and the household paper market’s growth prospects. With an expanding middle-income demographic and rising living standards, China’s market is poised for significant growth, inviting further investment and industry dynamism.
However, industry observers question whether this acquisition will alter the competitive landscape among China’s four major household paper families, which have maintained fierce competition through distinctive product strategies and innovation.
While some industry insiders believe the acquisition could lead to further consolidation, others think Vinda’s change in ownership will have a limited impact on the established market structure, with the sector continuing to attract more capital and enterprises, bringing new vitality and opportunities.
