DS Smith has signed an agreement to divest two packaging businesses in North Western France and Portugal to US-based International Paper for €63m.
The sale of the two businesses will help DS Smith in meeting the commitment made to the European Commission in relation to the clearance of €1.9bn acquisition of paper and packaging products manufacturer Papeles y Cartones de Europa (Europac), which was announced in June 2018.
DS Smith completed acquisition of Europac in January 2019.
International Paper is engaged in providing renewable fiber-based packaging, pulp and paper for customers in 150 countries. It employs more than 52,000 people.
DS Smith group chief executive Miles Roberts said: “I am delighted that we are on track to meet our commitment to the European Commission with both an attractive price and a good home for the businesses in International Paper.”
The sale of the two businesses by DS Smith is subject to customary closing conditions, including works council consultation and regulatory approvals. The deal is scheduled to be completed in the first half of FY2019-20.
In June 2018, DS Smith announced the proposed acquisition of Europac, a vertically integrated packaging business with a diversified customer portfolio. In 2017, Europac reported revenue of €868m and had recurring EBITDA of €147m.
With the completion of the acquisition of Europac, DS Smith now expects to improve its offer for customers, strengthen its global supply chain, realize annual run-rate pre-tax cost synergies of €50m (£44m), achieve attractive financial returns, and further develop Europac’s packaging assets.
In January this year, DS Smith announced receipt of acceptances representing 98.8% of the total share capital of Europac, thereby satisfying the final condition for the proposed acquisition.
Last month, DS Smith has agreed to sell its plastic division to sustainable packaging solutions provider Liqui-Box for an enterprise value of around $585m.
DS Smith Plastics, which includes Rapak and Worldwide Dispenser businesses, is expected to help Liqui-Box to enhance its design capabilities and service platform to better serve its customers.
Employing around 32,000 people, DS Smith is engaged in providing corrugated packaging and plastic packaging for its customers. It operates across 37 countries.