International Paper purchases DS Smith
The two companies have come to an agreement on the terms of an all-share combination
Shining a spotlight on the industry
Thursday, 18 Apr 2024 11:18 GMT
Goldman Sachs, Citi, and J.P. Morgan Cazenove consider the terms of the combination fair and reasonable
Update 24/04/24: Paper and packaging company, Mondi,
has announced it is no longer persuing plans to acquire DS Smith following the
latter’s deal with International Paper Company.
Mondi first announced its interest in buying DS Smith in
early February and then made an agreement in principle in March for an
all-stock deal valued at £5.14bn.
Responding to the increase of Mondi shares (8%) and the
decrease of DS Smith shares (11%) Mondi has said the transaction would no
longer be in the interest of its shareholders following the deal with
International Paper.
18/04/24:
DS Smith and International Paper Company have announced a combination of the two companies following a £5.3bn deal which has gone ahead after a failed deal with rival paper company Mondi.
Under completion of the combination, DS Smith shareholders will own approximately 33.7% and International Paper shareholders will own around 66.3% of the combined company.
Mark S. Sutton, chairman and chief executive officer of International Paper, comments: "Combining with DS Smith is a logical next step in International Paper's strategy to drive profitable growth by strengthening our global packaging business.
“DS Smith is a leader in packaging solutions with an extensive reach across Europe, which complements International Paper's capabilities and will accelerate growth through innovation and sustainability. We are confident this combination will drive significant value for our employees, customers, and shareholders."
Under the terms of the combination, DS Smith shareholders will be entitled to receive 0.1285 New International Paper shares for every DS Smith share.
The two company boards believe the combination will create a global leader in sustainable packaging solutions which is focused on the growing regions of North America and Europe.
Miles Roberts, group chief executive of DS Smith, says: “DS Smith has grown significantly through a dedication to customers, focus on innovation, quality of packaging and high levels of service.
“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.”
Roberts adds: “I am proud of all that DS Smith has achieved to date and am sure that the business will continue to flourish as part of a combined group with International Paper due to the capability and continued commitment of our colleagues."
The deal is expected to become effective in the fourth quarter of 2024 subject to the satisfaction of the combination terms and approval of DS Smith shareholders.
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