DS Smith to acquire Europac in US$2.2 billion deal as paper packaging demand rises

06 Jun 2018 --- UK-based DS Smith is set to buy Spanish paper rival, Europac, for US$2.2 billion including debt. DS Smith, a leading packaging supplier to Amazon, is aiming to consolidate its position within the expanding Western European paper packaging market.

The deal would be DS Smith’s biggest ever acquisition. Chief Executive Miles Roberts claims that it would make the supplier the market leader in France and number two in Spain.

“It’s an exceptional opportunity to enhance our customer offer in a key packaging growth region,” says Roberts.

Roberts added that there was no significant overlap between the two suppliers as Europac has a greater focus on paper production, making regulatory approval more likely.

DS Smith states: “Europac’s board of directors has confirmed that the acquisition is friendly and attractive.”

After Smurfit Kappa recently agreed a deal to acquire Dutch paper and recycling company, Reparenco, having resisted a takeover bid from US-based International Paper, there are sure signs that Western European paper suppliers are looking to consolidate amid a growing market. The growth has been attributed to increasing e-commerce popularity in the region.

DS Smith gave the following press statement:
Europac is a leading, Spanish listed, approximately 42 percent family-owned, highly complementary, vertically integrated packaging business. Europac has a diversified customer portfolio with strong customer relationships and FMCG orientation.

The Acquisition is conditional on the receipt of acceptances from Europac shareholders representing at least 50 percent.