Packaging firm DS Smith launches takeover of European rival
The deal values Europac at £1.7 billion.
Packaging firm DS Smith is to snap up rival Europac in a move that bolsters its business in Western Europe and values its takeover target at £1.7 billion.
The company said the acquisition – which is offering 16.80 euros (£14.68) per Europac share – will strengthen its global supply chain and provide an “exceptional” opportunity to scale the business.
The board of Spanish-listed Europac said it sees the acquisition as “friendly and attractive”, with the deal expected to close during the fourth quarter subject to regulatory approvals.
This acquisition will enhance our customer offer in Western Europe, a key packaging growth region, and help us meet the rising demand for our high-quality packaging and sustainable products DS Smith chief executive Miles Roberts
The takeover will also require shareholder backing.
DS Smith chief executive Miles Roberts said: “The acquisition of Europac is a very exciting development for DS Smith, strengthening our position as a leading global supplier of sustainable packaging solutions.”
He said DS Smith has a “long-standing relationship” with Europac, which it has “long admired” due to the quality of its assets, employees and customers.
“This acquisition will enhance our customer offer in Western Europe, a key packaging growth region, and help us meet the rising demand for our high-quality packaging and sustainable products,” Mr Roberts added.
“It will also strengthen our global supply chain and means we can serve our, and Europac’s, customers better.”
Europac – which is 42% family owned and is concentrated in Spain, Portugal and France – reported revenues of around £756 million in 2017, with underlying earnings of £138 million.
DS Smith is set to report its full-year results later this month, but says it delivered a “strong performance” with “good momentum in all regions”.
The FTSE 100-listed firm already operates in 37 countries and employs around 28,500 people.
Europac employs around 2,300 staff.
The news sent DS Smith shares to the top of on the FTSE 100, rising as much as 3% in Monday morning trading.