Tennessee-based International Paper is set to take over sustainable packaging company DS Smith after the companies announced a £5.8bn all-share deal.
In March, International Paper, one of the largest pulp and paper companies in the world, moved to hijack a £5.14bn all-share deal put forward by its British rival Mondi, based in Weybridge.
As part of the deal, the combined company will be headquartered in Memphis, Tennessee, with plans to establish a European headquarters at DS Smith’s existing base in London. The company will have a primary listing on the New York Stock Exchange and a secondary listing on the London Stock Exchange.
International Paper said the deal would create significant shareholder value and establish the companies as a global leader in sustainable packaging solutions. The pulp and paper company said the deal will focus on growth in North American and European Regions.
The combination with International Paper is an attractive opportunity to create a truly international sustainable packaging solutions leader.
As part of its strategy, International Paper said the deal will help establish a differentiated corrugated packaging company with approximately 90% of revenue from sustainable fibre-based packaging.
International Paper said combining the companies’ complementary business models can improve profitability by integrating approximately 500,000-600,000 tonnes of containerboard from DS Smith into the International Paper mill system, which will increase the combined integration rate to approximately 90%.
CEO of DS Smith, Miles Roberts, commented: “The combination with International Paper is an attractive opportunity to create a truly international sustainable packaging solutions leader that is well positioned in attractive and growing markets across Europe and North America.
“In a dynamic sustainable packaging landscape, the combination will enhance our global proposition to customers, create opportunities for colleagues and drive value for shareholders who can remain fully invested in such an exciting business.”
