Arjowiggins sale terminated

Richard Stuart-Turner
Thursday, January 3, 2019

Sequana's sale of Arjowiggins’ Graphic and Creative Papers businesses has been canned after the buyer got cold feet as a result of deteriorating market conditions.

Arjowiggins’ parent company Sequana had been in talks to sell the €528m (£475m) turnover papermaking businesses to Dutch firm Fineska, which owns graphic cardboard business Eska Group, in a €125m deal.

Negotiations for the sale began in July 2018 following a competitive bidding process and had been expected to be completed by the end of October 2018.

Sequana had called the move “part of its strategy of weighing up its options and playing its part in the necessary consolidation of the paper industry”.

However, Fineska withdrew from the sale process due to “an extremely deteriorated market conditions context, notably hit by significant and successive price increases in pulp, and to a lesser extent in energy” as well as a lack of visibility for financial year 2019, Sequana said.

The group added it is now “reviewing the different strategic options to be implemented” but declined to comment further when contacted by PrintWeek.

The Graphic and Creative Papers businesses comprise eight paper mills employing more than 2,000 people in France, the UK, Spain and China, including the Stoneywood mill in Scotland and the Chartham translucent papers mill in Kent.

Had it gone ahead, the deal would have marked Sequana’s exit from industrial-scale papermaking.

The French group, which sold its Arjowiggins Security papers business in 2017, separately provided an update on the long-running litigation with British American Tobacco (BAT) related to €578m in contested dividends.

Appeal hearings took place at the Court of Appeal in London in June 2018 and a decision had been expected in Q4 2018 but Sequana has now said "it does not have any information about the date on which the decision of the Court of Appeal in London will be handed down, as it is not customary for English courts to set out in advance the date of their decision, contrary to France".

It added the Nanterre Commercial Court has decided to extend Sequana's observation period until 17 May 2019, by which date the business will have to file a new sauvegarde plan, which would provide it with temporary creditor protection in France.

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