International Paper confirms that it has made an all-equity proposal to acquire the entire issued share capital of DS Smith, according to DS Smith Under the terms of the Proposal, DS Smith shareholders would receive 0.1285 shares in International Paper for each share they own in DS Smith resulting in DS Smith shareholders owning approximately 33.8 per cent. of the combined group. Based on the International Paper share price of $40.85 at close of business on 25 March 2024, the terms of the Proposal represent a value of 415 pence and premium of 48 per cent. to DS Smith's undisturbed share price on 7 February 2024 (being the day prior to the commencement of the offer period in respect of DS Smith) of 281 pence per DS Smith share.
There is compelling strategic and financial rationale for a combination between International Paper and DS Smith, according to DS Smith, as it would:
- · create a truly global leader in sustainable packaging solutions that is well positioned in attractive and growing markets;
- · significantly strengthen the combined corrugated packaging business in Europe with greater customer offerings;
- · create the opportunity to integrate the mill and box networks, balance the paper positions, and optimise the supply chains, of the respective companies in Europe and the US;
- · leverage market expertise of two experienced and innovative management teams to further enhance innovation, solutions and sustainability products for all customers;
- · enhance value creating solutions for global customers in attractive fast-moving consumer goods and e-commerce segments;
- · drive significant synergies including higher integration, commercial and operational improvements, and economies of scale across sourcing, supply chain and administration;
- · result in significant value creation for both International Paper and DS Smith shareholders; and
- · result in a combined group with a strong balance sheet that is expected to maintain an investment grade credit rating.
There can be no certainty that any offer will ultimately be made for DS Smith. The International Paper Board continues to consider M&A in a disciplined manner and believes an acquisition of DS Smith is aligned with International Paper' strategy to enhance its corrugated packaging business in Europe and would create significant value for both International Paper and DS Smith shareowners.