The European Commission has approved the acquisition of DS Smith by International Paper (IP) after IP agreed to sell five plants in Europe to address competition concerns.
When the acquisition was announced in November 2024, the Commission launched an investigation amid concerns the deal would reduce competition in the markets for the manufacture and supply of corrugated sheets Portugal, heavy duty corrugated sheets in Spain and corrugated cases in France.
Higher prices
The Commission found that the transaction would have resulted in high combined shares, as well as high concentration levels, in several local markets. It also found that, after the merger, there would be insufficient alternative competitors. This would have led to higher prices for consumers in the affected markets.
To address the concerns, IP offered to divest five plants in Europe: three in Normandy, France; one in Ovar, Portugal; and one in Bilbao, Spain.
The Commission has yet to approve those buying the divested businesses.
No concerns
‘These commitments fully address the competition concerns identified by the Commission, by fully removing the overlaps between the parties’ activities in the corrugated cases markets in north-west France,’ the Commission said in a statement. ‘The commitments also eliminate the overlap as regards the supply of corrugated sheets in the problematic local markets in Portugal and Spain and, as such, any vertical foreclosure concerns regarding corrugated cases.’
International Paper, headquartered in the US, is a provider of renewable fibre-based packaging and pulp products, as well as a recycler of fibre-based waste. DS Smith, headquartered in the UK, provides sustainable fibre-based packaging, mainly in the European and North American markets. It also has recycling and paper-making operations.
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