A proposed acquisition of SCA Packaging has been announced by DS Smith that will see the company bought for €1.6 billion (£1.3 billion).
SCA Packaging is the second largest packaging business in Europe and the acquisition would represent a significant opportunity for DS Smith to achieve its stated strategic aim of becoming the leading supplier of recycled packaging for consumer goods in Europe.
DS Smith proposes to finance the acquisition with existing and additional debt and a fully underwritten rights issue of 9 new ordinary shares for every 8 existing ordinary shares at 95p each to raise a total of £466 million. Shareholders have already agreed to sub-underwrite more than 50 per cent of this rights issue.
Its group chief executive Miles Roberts said: “This acquisition builds on DS Smith’s proven strategy and the successful acquisition of Otor. This is an exceptional opportunity to create value for shareholders by becoming the leading recycled packaging company across Europe – a company that will be better positioned to deliver even better service and innovation to our strong and growing FMCG customer base.
“SCA Packaging is a well invested business with long positions in recycling and packaging and short paper capacity that is very complementary to our strengths. It is a great step in DS Smith’s development and I look forward to working together with the team at SCA Packaging to create an outstanding supplier for our customers and making it a fulfilling place for our staff to work to deliver substantial value for our customers and shareholders.”
It is currently expected that the acquisition will complete during the second quarter of calendar 2012.
