International Paper to Acquire DS Smith in $7.2 Billion Deal
Big News in the Packaging Industry!
International Paper (IP) has made a groundbreaking move by agreeing to acquire DS Smith (DITHF) in a massive all-stock deal valued at 5.8 billion pounds ($7.2 billion), outbidding Mondi in the process.
The Battle of the Titans
Both International Paper and Mondi had their eyes set on DS Smith, but it was International Paper that ultimately emerged victorious with a compelling offer that DS Smith couldn’t resist.
Deadline Drama
The final bids from both potential buyers were due by April 23, putting pressure on the contenders to make their move or bow out gracefully.
Market Reaction
After news of the acquisition broke, DS Smith shares took a dip, falling 2% in London as investors digested the implications of the deal.
A Strategic Play
International Paper, a leading U.S. company, strategically entered the fray in late March with a higher bid, aiming to strengthen its presence in Europe amidst a wave of industry consolidation.
What’s in Store?
If the deal goes through, DS Smith shareholders will hold a significant stake of 33.7% in the combined entity, while International Paper shareholders will retain the majority ownership. The new company has plans for a secondary listing in London.
A Show of Support
DS Smith has thrown its weight behind the acquisition and intends to recommend that its shareholders give the green light to the transaction, pending the necessary shareholder approval and regulatory nods.
Analyst Insights
Market analysts at Jefferies weighed in on the development, noting that while the DS Smith board endorsed International Paper’s offer, there’s no break fee involved. The focus now shifts to what Mondi might bring to the table and the potential synergies on offer.
A Look Back
Recall that Mondi had previously agreed in principle to acquire DS Smith for £5.14 billion, but International Paper swooped in with a better deal, setting the stage for an exciting chapter in the packaging sector.
