SCA completes divestment of its packaging operations to DS Smith

DS Smith has completed the takeover of SCA Packaging
Source: Companies
02 Jul 2012 − 

SCA’s previously announced divestment of its packaging business has been completed and DS Smith is now the second-largest producer of recycled corrugated packaging in Europe. The consideration paid on completion was €1,606 million gross. This is subject to customary post completion price adjustments.

SCA’s two kraftliner mills in Sweden are not included in the transaction as they are well integrated with SCA´s forest products operations. The divested operations have approximately 12,000 employees.

In order for the European competition authorities to approve the deal, DS Smith had to agree to divest one of two plants producing heavy duty corrugated packaging and one litho-laminated corrugated packaging plant in the UK as well as one of three corrugated packaging plants in the French Brittany region. Further details have not been given so far.

Since the announcement of the acquisition in January, DS Smith has put in place detailed integration plans which it will now be implementing.

Commenting on the completion of the Acquisition, Miles Roberts, DS Smith’s Group Chief Executive, said “We are delighted to have completed this acquisition, which is a key step in our strategic plan to become the leading supplier of recycled packaging across Europe.”

SCA’s packaging operations, excluding the two kraftliner mills, had net sales in 2010 of about €2.5bn and generated an operating profit excluding restructuring costs of approximately €117m. The SCA Packgaing Group, excluding locations of certain joint ventures, owns facilities in 21 countries, including 109 corrugated packaging manufacturing locations and four recycled containerboard mills. Last year, the company sold 3.6 million tonnes of recycled fibre, 1.4 million tonnes of corrugated case material and had corrugated sales volumes of 3.4 million m².

In the UK, DS Smith has 28 corrugated factories, three paper mills and 15 recycling depots. The continental corrugated segment has 27 corrugated operations spread across France, Italy, Poland, Czech Republic and Slovakia. Moreover, DS Smith has plastic packaging facilities at 21 sites across the world including the USA and New Zealand.

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