The acquisition is projected to generate minimum cash savings of $514 million (£413 million) within four years through operational synergies across the integrated network of mills, box plants and global supply chain.
This will entail reducing duplicated overheads and leveraging increased scale for procurement.
Under the terms of the merger, DS Smith shareholders will receive 0.1285 new International Paper Shares for each DS Smith Share they hold.
Upon completion of the merger, DS Smith shareholders will hold approximately 33.7% of the combined entity, while International Paper shareholders will own the remaining 66.3%.
International Paper will also pursue a secondary listing of its shares on the London Stock Exchange.
The merger is anticipated to become effective in the fourth quarter of 2024.
Opportunity
Miles Roberts, group chief executive of DS Smith, said: “The combination with International Paper is an attractive opportunity to create a truly international sustainable packaging solutions leader that is well positioned in attractive and growing markets across Europe and North America. It combines two focused and complementary businesses.
“DS Smith has grown significantly through a dedication to customers, focus on innovation, quality of packaging and high levels of service. In a dynamic sustainable packaging landscape, the combination will enhance our global proposition to customers, create opportunities for colleagues and drive value for shareholders who can remain fully invested in such an exciting business.
“I am proud of all that DS Smith has achieved to date and am sure that the business will continue to flourish as part of a combined group with International Paper due to the capability and continued commitment of our colleagues.”
Andrew K Silvernail is set to assume the role of chief executive of the merged entity, with Mr Roberts staying on as a consultant to aid in the integration process.
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