Svenska Cellulosa Aktiebolaget (SCA), Europe's largest paper-tissue maker, made an offer for the rest of China's Vinda International it does not already own to tap rising demand for hygiene products in Asia. The Swedish company was offering HK$11 a share in cash for Vinda, representing a 35 per cent premium to the average closing price in the past 30 trading days and valuing the Chinese company at 9.4 billion kronor (HK$10.9 billion), it said in a statement. SCA already owns 21.7 per cent of Vinda, the third-largest tissue company in China. Vinda is a strong player in the Chinese tissue market and has demonstrated healthy growth and profitability SCA chief executive Jan Johansson SCA, the maker of Tempo tissue and also Europe's biggest private forest owner, is transforming into a personal-care and hygiene business from a paper company after the sale of its packaging unit last year. The firm first took a stake in Vinda in March 2007 to tap the Chinese tissue market, the world's second-largest. "It's a reasonable price," said Karri Rinta, an analyst at Handelsbanken. "From a demand perspective the Chinese market is still very attractive." Vinda … has demonstrated healthy growth and profitability JAN JOHANSSON, SVENSKA CELLULOSA Vinda's sales increased 26 per cent to about 5 billion kronor in last year, with an operating profit margin of 12.9 per cent. Vinda rose 37 per cent to HK$10.88 in Hong Kong trading, the most in more than six years. SCA gained up to 1 per cent to 167.20 kronor in Stockholm, valuing it at 118 billion kronor. SCA is seeking acquisitions globally and has as much as 9 billion kronor to spend on purchases, chief executive Jan Johansson said in January. SCA, which wants Vinda to remain listed on the Hong Kong exchange, said it would like to take a more active role in developing the business. "Vinda is a strong player in the Chinese tissue market and has demonstrated healthy growth and profitability," Johansson said yesterday. "As a majority shareholder, we would see the potential to further strengthen the company to ensure its future competitiveness." The offer is conditional on reaching a holding representing more than 50 per cent of the votes. SCA will publish its prospectus before September 30 and expects to complete the purchase in the fourth quarter. JP Morgan Chase, the sole financial adviser to SCA on the deal, had granted the Swedish company a credit facility of US$1.1 billion, the company said. SCA sold its packaging business to DS Smith last year and has been focusing on the hygiene segment, which now represents 80 per cent of annual sales, compared with 46 per cent in 2000. The company has focused on expansion in Asia, Latin America, Eastern Europe and the Middle East, targeting markets with improving living standards. Last year, the company agreed to buy Taiwanese-based Everbeauty for about 1.9 billion kronor.