International Paper Steps Back from Proposed Acquisition of Smurfit Kappa

SEATTLE (Scrap Monster): International Paper Company (IP) has confirmed that the company will not make an offer to acquire the assets of Smurfit Kappa Group plc. The decision comes in the light of lack of engagement by Smurfit Kappa’s Management and Board of Directors. The Irish Takeover Panel had granted time to International Paper until 7 AM June 6, 2018 to decide on whether to make binding offer to acquire the Europe’s leading corrugated packaging company.

Mark Sutton, Chairman and CEO of International Paper noted that it still believes in the strategic and financial potential of the combined entity. The company will continue to remain focused on executing its strategy. Expressing excitement about its outlook, Sutton stated that the company will explore all possible levers to create and enhance its shareholder value. In accordance with the Irish Takeover Rules, the company reserves the right within the next twelve months to set aside this announcement, Sutton added.

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Initially, in February 2018, IP had met with representatives of Smurfit Kappa's Board of Directors with a proposal to acquire the company. It had offered €22 cash and 0.3028 new International Paper shares, which in turn could have left Smurfit Kappa shareholders with a 15% stake in a combined company, which was rejected by Smurfit Kappa. Following this, IP made a revised offer, effecting 15% increase in cash component in comparison with the earlier proposal.

The revised proposal was publicly rejected by Smurfit Kappa, calling it fundamentally opportunistic. The offer was rejected by company’s Board of Directors too, by deciding to pursue its future as an independent company. Following this, the Irish Takeover Panel had granted 3 weeks time to IP to finalize on acquisition offer.