Mondi is in the early stages of considering a possible all share combination with DS Smith.
Mondi believes that a merger with DS Smith is an ‘exciting opportunity’ to become Europe’s leader in sustainable packaging. The company says it wants to accelerate growth in the paper-based packaging sector.
According to Reuters, combining to the two UK businesses could create a packaging giant worth more than £10 billion (EUR 11.7 billion). The agency adds that the ‘highly preliminary expression of interest’ sparked a 13% jump in DS Smith shares driving its market value close to £4.5 billion.
Mondi’s statement says the benefits of the potential deal include business synergy, enhanced paper supply and shared expertise in containerboard, corrugated solutions and flexible packaging. It notes there is no certainty an offer will ultimately be made to acquire DS Smith.
Any transaction would be assessed against its capital allocation framework.
By law, Mondi must announce by 7 March 2024 whether or not it intends to make an offer for DS Smith. This deadline can only be extended with the consent of the UK’s Takeover Panel. It says a further announcement will be made when appropriate.