Essity AB is preparing to launch a sales process for its consumer tissue division as soon as next month, according to sources familiar with the matter. The Swedish company's largest division by sales, generating nearly 44 billion kronor last year, employs about 13,000 people across 29 production facilities. Industry players and private equity firms will be invited to bid for the unit producing toilet paper, tissues and napkins under brands including Lotus, Tempo and Cushelle.

The business could be valued between €2.5 billion and €3 billion. Morgan Stanley is advising on the dual-track process, which allows for the division to be sold or separated into a new listed company in Sweden. A conclusion is expected in the first half of 2027.

The move follows activist investor Cevian Capital's July disclosure of a 5.6% stake, citing "significant value potential" and support for the tissue review. Industrivärden, Essity's largest shareholder, has also increased its holding. CEO Ulrika Kolsrud stated the separation would allow the group to focus on higher-value-added categories, noting the tissue unit has the lowest margins.

Essity has pursued similar exits before, notably selling its stake in Asian tissue maker Vinda International in 2023. The potential sale considers drawbacks including lost synergies and one-time costs, while exploring opportunities to create value.