Ontex Group is considering tabling a USD 1.10 billion bid for the personal care business that Domtar flagged for a strategic review last month, Bloomberg reported.
According to sources close to the process, the Belgian disposable hygiene products manufacturer has hired an advisor to prepare an offer, which may be made alongside a partner.
However, they added the usual caveat there is no guarantee a proposal is forthcoming, and Domtar may decide to keep the unit on completing its strategic review.
Representatives for the two companies either declined or did not respond to requests for comment when contacted by Bloomberg.
Domtar makes a variety of fibre-based products, including communication, speciality and packaging papers, market pulp and absorbent hygiene items.
The group has some 9,200 employees serving more than 50 countries worldwide and its annual sales for the 12 months ended 31st December 2019 reached USD 5.22 billion (H1 2020: USD 2.29 billion).
Domtar’s personal care segment consists of the design, manufacturing, marketing and distribution of adult incontinence pads and infant nappy (or diapers).
The group claims to be one of the leading suppliers of these kinds of products sold into North America and Europe, and its brands include Attends, IncoPack, Reassure and Chelino.
Its segment accounted for 18.0 per cent, or USD 953.00 million, of total revenue in FY 2019
Domtar announced in its H2 2020 report it plans to implement a cost reduction programme targeting USD 200.00 million in annual run-rate savings, to be realised by the end of 2021.
Initiatives include permanently closing some facilities and repurposing some of the assets.
Domtar also announced a strategic review for its personal care division but did not set a deadline for concluding the process.
Zephyr, the M&A database published by Bureau van Dijk, shows 36 deals targeting the global sanitary paper product manufacturing segment have been announced in 2020 to date.
Kimberly-Clark’s USD 1.20 billion acquisition of Softex Indonesia, which was signed off at the beginning of the month, is the largest of the year so far.
© Zephus Ltd