International Paper (IP) has revealed details of potential cost savings and value creation from its proposed acquisition of DS Smith.
The move comes as IP seeks to strengthen its foothold in the global packaging market.
Synergies Expected to Drive Growth
IP anticipates at least $514 million annually in pre-tax cash synergies within four years of acquiring DS Smith. These benefits stem from combining operations, streamlining supply chains, and leveraging economies of scale. The combined company, headquartered in Memphis, Tennessee, is also expected to see immediate earnings per share growth.
Focus on European and North American Markets
The acquisition would allow IP to expand its European packaging presence by establishing a secondary headquarters in London. Existing manufacturing facilities in both regions are expected to remain operational.
Formal Offer on Horizon
Under U.K. takeover regulations, IP has until April 23rd, 2024 to either make a formal offer for DS Smith or publicly announce its decision not to proceed. The announcement by International Paper outlines potential cost savings of at least $514 million annually and immediate earnings per share growth for the combined company. However, this news release does not constitute a final offer, and there is no guarantee a transaction will take place. International Paper will provide further updates as they become available.
