Smurfit Kappa Declares €460 million Acquisition of Paper & Recycling Business

SEATTLE (Scrap Monster): Paper-based packaging major Smurfit Kappa has announced that it has reached an agreement to acquire the assets of Reparenco, a privately owned paper and recycling business based in the Netherlands. The acquisition deal is for a cash consideration of approximately €460 million, which will be funded from the company’s existing resources, sources said. The transaction is expected to complete within a period of four to six weeks, subject to customary closing conditions and necessary regulatory approvals.

The acquisition will cover Reparenco’s paper mill in the Netherlands, which operates two paper machines. The first machine has a production capacity of 405,000 tonnes of recycled containerboard, whereas the second has a capacity of 270,000 tonnes of graphic paper with a provision to be converted into containerboard. The paper mill also includes a 750,000 tonne recovered fibre operation.

Tony Smurfit, CEO, Smurfit Kappa Group noted that Reparenco will be a strong strategic fit to the company’s European operations, being complementary with its existing business. The acquisition will accelerate the Group’s strategic objectives under its Medium Term Plan and is expected to deliver significant synergies in the near-term. The acquisition would bring short, medium and long term value for its stakeholders. He also welcomed all the Reparenco employees to the company. Incidentally, Reparenco employs 315 people and has gross assets totaling €189 million.

The negotiations to buy the Dutch business began on February 1, before the U.S.-based International Paper (IP) made its open offer to acquire Smurfit Kappa. The new acquisition will nearly seal the prospects of the takeover bid from IP.