Scott Paper to Sell Brazilian Tissue Unit

Scott Paper Co. and a Brazilian company have signed an agreement to sell a Brazilian tissue operation that they own jointly for about $40 million. Scott Paper said.

Scott owns 49% of Companhia de Papeis, which manufactures bathroom tissue, paper towels, facial tissues and paper napkins. The company is based in Rio de Janeiro.

Scott Worldwide, a Scott subsidiary, and Companhia Auxilar de Empresas de Mineracao are selling COPA to a subsidiary of Industrias Klabin de Papel e Cellulosa SA.

The agreement is for about $40 million in cash and notes.

“Our Brazilian affiliate has been and remains profitable,” J. Richard Leaman Jr., a Scott executive vice president who is president of Scott Worldwide, said in a statement. “However, we have determined that this tissue market does not meet the business criteria and long-term strategy we have established for the growth of our personal care and cleaning business.”

Leaman said Scott will use the net proceeds to reduce debt and invest in business worldwide that have the greatest growth opportunities.

The sale is subject to the approval of the Scott Paper Co. board of directors.