DS Smith to launch sale of plastics packaging division in potential US$800m deal
22 Oct 2018 --- British packaging group DS Smith is reportedly expected to launch the sale of its plastic packaging division in November, in a deal that could be worth US$800 million, Reuters has reported from “three sources familiar with the matter.”
Two of the sources said the division has earnings before interest, tax, depreciation and amortization of US$80 million and the sources added that financial sponsors were looking at the asset, with more information coming next months, Reuters reports.
PackagingInsights has reached out to DS Smith for further information.
Alongside its plastic packaging division, DS Smith manufacturers corrugated packaging for the transit, transport, consumer, e-commerce and retail markets, as well as others. PackagingInsights recently met with the company at FachPack 2018 to discuss its latest e-commerce innovations.
The landscape of packaging has undergone a few tremors recently.
In one of the most significant packaging stories of the year, the Amcor-Bemis US$6.8 billion merger signaled an offensive global plastics expansion in a move which boldly bets on the future of the material amid increased public and regulatory pressures.
Bemis has a strong position in the Americas’ plastic packaging business with a US$4 billion turnover. Amcor is expecting to increase its flexible packaging revenues in this region from approximately US$1 billion to approximately US$4 billion as a result of this deal.
Huhtamaki announced that it is considering closing and writing-off non-competitive production lines in a move that is hoped to generate US$17-20million (€15-18million) by 2020. The company estimates that the effect of write-offs and other actions amounts to approximately US$-35million (€-30million), which would be reported as items affecting comparability (IAC) in the fourth quarter of 2018. It has not been disclosed which lines will be targeted nor how many jobs may be at risk. Although the company has not specified which lines will be closed, food and drink packaging have been said to be unaffected by the move.
The reasons behind DS Smith's proposed plastic packaging division sale have been completely undisclosed to date.
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