Long-established UK packaging business DS Smith has agreed terms with US firm International Paper to be taken over in a £5.8bn all-share deal. This knocks Mondi, which had made an earlier lower all-share offer for DS Smith, out of the picture.
International Paper proposes to seek a secondary listing on the London Stock Exchange and establish an HQ for its European interests at DS Smith’s London offices. Once completed, International Paper shareholders will own c.66 per cent of the combined company, with DS Smith shareholders owning the balance.
Both companies now have to seek the approval of their respective shareholders for the deal, which they believe will create a global leader in sustainable packaging and create the opportunity for significant cost savings by optimising the mills, supply chains, and freight costs. Around 400 head office and senior management jobs are expected to be cut. DS Smith has 30,000 employees worldwide, 4,750 of whom are in the UK, and International Paper employs a total of 39,000.
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