IP Reached Agreement to Acquire DS Smith

SEATTLE (Scrap Monster): Memphis, Tennessee- headquartered International Paper (IP) and DS Smith announced that they have entered into an agreement on the terms of a recommended all-share combination.

The combination, which will create a global leaders in sustainable packaging solutions, is expected to close by Q4 this year, subject to approval by shareholders of both the companies and customary closing conditions. It will focus mainly on the growing North American and European regions.

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As per terms of the combination, each DS Smith share will be valued at 415 pence per share. IP will issue 0.1285 shares for each DS Smith share. Accordingly, IP shareholders will have proforma ownership of 66.3% in the combined entity, whereas the remaining 33.7% ownership will be held by DS Smith shareholders. The transaction is valued at approximately $9.9 billion.

The combination is expected to deliver at least $514 million of pre-tax cash synergies on an annual run-rate basis by the end of the fourth year. The total costs to achieve the synergies is estimated at around $370 million. Nearly 33% of the synergies would be achieved in the first year following the closing of the combination.

The combined company will have its headquarters in Memphis, Tennessee, with an EMEA headquarters to be located at DS Smith’s London headquarters.