Bidding War Heats Up for Packaging Giant DS Smith

Image Source: DS Smith

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The race to acquire DS Smith, a leading player in the paper and packaging industry, has intensified with International Paper throwing its hat into the ring.

This comes after Jeffries, a financial services firm, previously identified a potential merger between DS Smith and Mondi as a way to create an industry leader.

International Paper argues its acquisition would create a global leader in sustainable packaging solutions, particularly in growing markets. The combined entity would also strengthen its European operations and offer customers a wider range of products. Optimizing supply chains, integrating production networks, and balancing paper production positions are further benefits highlighted by International Paper.

This move comes after DS Smith previously acknowledged "strategic merits and potential for value creation" in a possible merger with International Paper. However, the company is currently considering offers from both International Paper and Mondi.

International Paper's bid follows the recent merger of Smurfit Kappa and WestRock, which created a $20 billion packaging giant. Notably, International Paper had previously attempted to acquire Smurfit Kappa in 2018, but those offers were unsuccessful.

The pressure is now on International Paper. As per UK Takeover Code regulations, they have until April 23rd, 2024, to either submit a firm offer for DS Smith or publicly announce their withdrawal from the bidding process. International Paper also retains the right to modify its offer or consider alternative forms of compensation.

With multiple players vying for DS Smith's ownership, the packaging industry is poised for a significant consolidation. Stakeholders in DS Smith can anticipate further developments in the coming weeks as the bidding war unfolds.

More info: Possible offer for DS Smith Plc by International Paper Company