US paper giant drops interest in Smurfit Kappa
International Paper has scrapped plans for an €8.9bn (£7.8bn) takeover offer for packaging giant Smurfit Kappa, which has a major operation in Lurgan.
US-listed International Paper confirmed it was walking away from a potential deal months after putting forward an improved bid to its UK rival.
"The company will not make an offer for Smurfit Kappa Group, given the lack of engagement by Smurfit Kappa's board of directors and management," International Paper said.
It means scrapping a proposal first tabled in March of €25.25 (£22.04) in cash and 0.3028 of new shares in International Paper, per Smurfit Kappa share.
Chief executive Tony Smurfit said the business would drive ahead with its medium-term plan.
This includes the acquisition of Reparenco - a privately-owned Dutch paper and recycling business it snapped up for €460m (£402m) last month.
The proposal from International Paper for Smurfit Kappa had been sweetened from its initial approach made earlier that month.
It valued each Smurfit Kappa share at €37.54 (£32.89) versus the previous offer of €36.46 (£31.95).
Smurfit had rebuffed the proposed bid, saying it failed to reflect its true value.
Chairman and chief executive of International Paper Mark Sutton said: "While we continue to believe in the strategic and financial potential of this combination, our commitment was to proceed in a disciplined manner that would create value for both sets of shareholders.
"Moving forward, we remain focused on executing our strategy and are excited about our outlook.
"We have many levers to create shareholder value and will be responsible stewards of our shareholders' capital."
The news sent Smurfit Kappa shares to the top of the FTSE 100.