(Reuters) -British paper and packaging firm Mondi (LON:MNDI) said on Thursday it would sell its personal care components business to Japan's Nitto Denko Corp for 615 million euros ($699 million), as it seeks to focus on building its packaging division.
The FTSE 100-listed company said the sale reflected its desire to expand in packaging and the "limited overlap" of personal care components (PCC) with the rest of its business, sending its shares up 1% to 1,935 pence as of 08:05 GMT.
The PCC business, which produces components used in baby wipes, diapers and other personal and home care products, had reported core underlying earnings of 42 million euros for 2020.
For Nitto Denko, which makes a range of materials used in electronics, mobility and construction, the deal aligns with its goals to expand in "human life" products.
Analysts at Jefferies called the sale a "positive" for Mondi, adding that "the PCC business has been a drag on performance & management time in recent years."
($1 = 0.8804 euros)