Int'l Paper issues statement regarding possible offer for DS Smith (DITHF); confirms that significant progress has been made in reciprocal due diligence as facilitated by the DS Smith Board and Management (39.07)
- International Paper confirms that significant progress has been made in reciprocal due diligence as facilitated by the DS Smith Board and Management, and that it is now in a position to provide shareholders with more detail on the type and quantum of synergies it believes would arise from the Combination.
- Corrugated packaging solutions is a core component of DS Smith's business. Due diligence has confirmed International Paper's belief that the Combination will significantly strengthen the combined packaging business and customer offerings -- with packaging representing 84% of International Paper's current sales, approximately $1.5 billion (£1.2 billion1) of which is driven from European sales.
- Commenting on the Combination, Mark Sutton, Chairman and CEO of International Paper, said: "Bringing International Paper together with DS Smith is a logical next step in International Paper's strategy to create value by strengthening our packaging businesses in North America and Europe. By combining the strengths of both companies, we believe we can enhance our offering of sustainable packaging solutions for customers in attractive and growing markets."
- International Paper expects that the Combination will generate significant synergies and drive compelling value creation for DS Smith and International Paper shareholders. The delivery of the synergies will be supported by International Paper's significant expertise in acquiring and integrating businesses. In addition, International Paper's confidence in delivering a successful integration is underpinned by DS Smith's own expertise in acquiring businesses and integrating them.
- International Paper anticipates that the total costs to achieve the synergies outlined above would be approximately $370 million (£293 million1). International Paper expects that approximately 33% of the synergies outlined above would be achieved by the end of the first year following Completion, with approximately 66% and 95% achieved by the end of the second and third years following Completion, all on a run-rate basis, respectively.
- As part of the Combination, International Paper envisages that DS Smith's North American manufacturing locations and International Paper's European manufacturing locations would continue their respective operations. Though it is intended that the Combined Group would be headquartered and domiciled in Memphis, Tennessee, USA, at International Paper's existing headquarters, International Paper intends to maintain key elements of DS Smith's headquarters functions and is proposing to establish a European headquarters in London, United Kingdom, at DS Smith's existing headquarters (subject to any required information and consultation with any impacted employees and/or their representatives in accordance with applicable law).
- As part of the Combination, any new International Paper shares issued to DS Smith shareholders will be authorized for primary listing on the New York Stock Exchange subject to official notice of issuance and International Paper intends to seek a secondary listing of its shares on the London Stock Exchange.