UK packaging firm DS Smith agrees £5.8bn takeover by US group

UK-based packaging company DS Smith has agreed to a £5.8 billion takeover by US rival International Paper. As per the deal, International Paper will own 66.3% of the combined group, while DS Smith will own the remaining 33.7%.

It comes after International Paper muscled in on a £5.1 billion deal between DS Smith and London-listed rival Mondi, which was agreed in principle in March.

The US firm will also seek a secondary listing of its shares on the London Stock Exchange after the takeover is completed. However, the acquisition will result in job cuts and around 400 roles have already been identified as at risk. This is about 0.6% of the combined workforce worldwide, and it will primarily affect the corporate, head office, and senior management positions of both companies.

The goal is to save at least £413 million in “synergies” after the takeover. The precise number of jobs affected in the UK or DS Smith’s operations is yet to be announced.

International Paper stated that aside from the potential headcount reduction resulting from the review, the combination will not result in significant additional job losses, including frontline operational roles, mill, or plant closures.

The enlarged company will be headquartered in Memphis, with DS Smith’s key elements retained. The European headquarters will be based in London.

The combined group will be headed up by International Paper’s incoming chief executive, Andrew Silvernail, with the rest of the US firm’s leadership team remaining in place.

DS Smith’s chief executive, Miles Roberts, will remain on as a consultant for up to two years after the deal.

Roberts said: “The combination with International Paper is an attractive opportunity to create a truly international sustainable packaging solutions leader well positioned in attractive and growing markets across Europe and North America.”

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