Advances Hypermarcas Division sale

Negotiations for the sale of diapers Hypermarcas for the American Kimberly-Clark-who would have a better deal for drivers-have evolved over the past few weeks, it was found the value. At first, initial market calculations considered the transaction value between 1.5 billion R$ diapers and $ 2 billion.
Meetings between representatives of law firms Kimberly and Hypermarcas controllers have intensified since last week, according to a source.
The Japanese Unicharm, which sells the brand Mamypoko, also had been considered a likely candidate, as well as the Swedish SCA. Part of the negotiations the banks Citigroup, Bank of America Merrill Lynch and Banco Bradesco BBI.
The Brazil is the fourth largest market of diapers in the world, estimated at 10 billion units per year
The diaper area represents little more than 40% of revenue consumer division Hypermarcas, owner of the trademarks Pompom, Cremer Disney Baby, Sambrook and Bigfral (geriatric). The unit of diapers recorded net revenues of R$ 858 million last year.
The Brazil is the fourth largest market of diapers in the world, estimated at 10 billion units per year. In 2014 moved $ 2.46 billion, according to data from Euromonitor consulting.
If the sale to Kimberly-Clark in fact occur, the Brazilian market will increase in the level of concentration. The American multinational, owner of the Huggies brand, is the second largest company of this sector-had market share of 27.2% in Brazil in 2014, according to Euromonitor.
Hypermarcas comes in third place, with slice of 14.4%. If the deal out, Kimberly would take a slice of almost 42%, surpassing the leader Procter & Gamble (P & G), maker of Pampers, which owns 31.1%.
In mid-August, Kimberly confirmed that he had been asked to analyze the Division of diapers Hypermarcas, but didn't comment on the progress of the negotiations. Sought again now, reported that no comments on rumors or speculation. Present in Brazil since 1996, the company has five factories, five distribution centers and 4.3 thousand direct employees. The growth projection for 2015 is 15%, with net revenues of r $ 4 billion.
SCA (Svenska Cellulosa Aktiebolaget), who also didn't want to pronounce, is headquartered in Sweden and global revenues of € 11.4 billion. Sells adult diapers and children. Tena, Biofral, BabyFral, BioCare Baby and DryBaby are the brands marketed in Brazil, according to the website of the company headquarters, which operates in more than 100 countries.
Until 2011, SCA had a discreet presence in the Brazilian market. Bought, so the manufacturer paulista Pro Descart, valued then at R$ 114 million, excluding debt. In this operation, the brand Biofral, diapers for adults, joined the SCA's portfolio, which competes in that category with Bigfral Hypermarcas. Kimberly dispute that niche with the brand Plenitud.
The Japanese Unicharm, who declined to comment for this story, sells in Brazil children's diapers Mamypoko brand, with facilities in Jaguariúna (São Paulo). Operates in 18 countries, with a strong presence in Asia.
In China, specifically, Unicharm leads the diaper market alongside Kimberly and Procter & Gamble-the three together have more than 50 percent of the market.
From April to December last year, Unicharm, which has shares traded on the Tokyo Stock Exchange, recorded revenues equivalent to $ 5.178 billion, according to calculations of the date value, considering the average parity between the yen and the dollar in the period. Sought, the company said it would not make any comment on the subject.
Another competitor in the segment of infant diapers is Chile's CMPC, which entered the Brazilian market six years ago, when he bought the Improvements by R$ 400 million. Owns the brand Babysec.
The sale of diapers Hypermarcas cause fall next to 20% in the company's annual sales, according to Citi, but promises to improve margins and, if it is used to pay debts, reduce leverage so relevant.
The sale of diapers is also positive to reduce exposure to the dollar: Hypermarcas pulp used in the manufacturing process is denominated in dollar. To reduce the currency exposure is positive for credit, because the revenues of the company are published in real.
Hypermarcas, in may, seeking value close to 1.5 billion R$ by operation. With the deterioration of the economy and the loss of value of Brazilian assets, trading tends to be more fierce.
The papers of the company on the stock exchange mirror this scenario more difficult-in mid-June showed high trajectory, initiated in December last year, reaching just over $ 23. Come falling since then, showing some recovery from mid-September. Today cost around r $ 17, same level of a year ago.
The company will disclose the balance for the third quarter tomorrow. Net revenues grew 10.8% Hypermarcas from April to June this year, as compared to the same period in 2014, to 1.26 billion R$. Ebitda amounted to R$ 261.2 million, down 3.7%. Net profit fell 9.3 percent to 110.9 million R$, with negative effect of 23.6 million foreign exchange R$.