DS Smith has today announced its proposed purchase of the packaging division of SCA Packaging (excluding the kraftliner assets) for approximately €1.6 billion (£1.3bn).
SCA is the second largest packaging business in Europe and the acquisition represents a significant opportunity for DS Smith to achieve its stated strategic aim of becoming the leading supplier of recycled packaging for consumer goods in Europe.
Subject to regulatory clearances, the acquisition completion is expected during the second quarter of 2012.
DS Smith's Group CEO Miles Roberts commented: “This acquisition builds on DS Smith’s proven strategy and the successful acquisition of Otor. This is an exceptional opportunity to create value for shareholders by becoming the leading recycled packaging company across Europe – a company that will be better positioned to deliver even better service and innovation to our strong and growing FMCG customer base. SCA Packaging is a well invested business with long positions in recycling and packaging and short paper capacity that is very complementary to our strengths. It is a great step in DS Smith’s development and I look forward to working together with the team at SCA Packaging to create an outstanding supplier for our customers and making it a fulfilling place for our staff to work to deliver substantial value for our customers and shareholders.”
DS Smith's Chairman, Gareth Davis said: “This acquisition is a unique opportunity, offering the combination of a clear strategic rationale, potentially excellent financial returns and a step change in DS Smith’s capabilities to deliver the recycled packaging service that our customers increasingly want on a pan-European basis. We recognise both the opportunities and the challenges that the acquisition will bring and we have planned and invested accordingly. We are focussed and determined to integrate, develop and grow these two excellent businesses as the platform for delivering superior returns for our investors over the years to come.
