Memphis, Tennessee based International Paper (IP) and London, England based DS Smith announced that they have reached an agreement on the terms of an all-share combination to create a global leader of sustainable packaging solutions.
IP will issue 0.1285 shares for each DS Smith share, resulting in pro forma ownership of 66.3 percent for IP shareholders and 33.7 percent for DS Smith, implying a transaction value of approximately $9.9 billion. The Combination is expected to close by the fourth quarter of 2024, the news release said.
“Combining with DS Smith is a logical next step in IP’s strategy to drive profitable growth by strengthening our global packaging business,” said Mark S. Sutton, Chairman and CEO of IP. “DS Smith is a leader in packaging solutions with an extensive reach across Europe, which complements IP’s capabilities and will accelerate growth through innovation and sustainability.”
CEO-Elect of IP, Andrew K. Silvernail added, “Bringing together the capabilities and expertise of both companies will create a winning position in renewable packaging across Europe, while also enhancing IP’s North American business. I firmly believe this strategic combination offers a unique and highly compelling opportunity to create tremendous shareholder value.”
CEO of DS Smith, Miles Roberts, said, “The combination with IP is an attractive opportunity to create a truly international sustainable packaging solutions leader that is well positioned in attractive and growing markets across Europe and North America. It combines two focused and complementary businesses. DS Smith has grown significantly through a dedication to customers, focus on innovation, quality of packaging and high levels of service. In a dynamic sustainable packaging landscape, the combination will enhance our global proposition to customers, create opportunities for colleagues and drive value for shareholders who can remain fully invested in such an exciting business.”
The release said that Andrew K. Silvernail will be CEO of the combined company and Miles Roberts will be retained as a consultant to assist with integration matters. As part of the Combination, up to two non-executive directors of DS Smith will be invited to join the Board of the combined company upon close of the Combination.
The combined company will be headquartered in Memphis, Tennessee, with plans to establish an EMEA headquarters at DS Smith’s existing London headquarters.