UK $13 bln cardboard saga has durable M&A endgame
09/02/2024 11:11
(The author is a Reuters Breakingviews columnist. The opinions
expressed are her own.)
By Aimee Donnellan
LONDON, Feb 9 (Reuters Breakingviews) - Three years
after its last approach, $7.4 bln Mondi wants to merge with $5.4
bln DS Smith. Amid slowing consumer demand, there’s more
strategic and financial logic in uniting the UK-listed
packagers. That doesn’t mean there won’t be a squabble over how
they’re scrunched together.
Full view will be published shortly.
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CONTEXT NEWS
Britain's Mondi said on Feb. 8 it is in the early stages of
considering a possible all-share bid for its smaller rival DS
Smith, a move which could create a packaging giant worth more
than 10 billion pounds.
DS Smith disclosed that it received a “highly preliminary
expression of interest” from Mondi, although no formal proposal,
sparking a 13% jump in its shares which drove its market value
as high as 4.49 billion pounds.
A bid for DS Smith by Mondi, which under UK takeover rules
has until March 7 to make a firm offer or walk away, would mark
the second recent multi-billion attempt at consolidation in the
paper and packaging industry.
Rival Smurfit Kappa is buying WestRock in a $11 billion deal
that has not yet closed.
As of 1015 GMT on Feb. 9, DS Smith shares were trading at
3.14 pounds, compared to 2.81 pounds on Feb. 7. Mondi’s were
trading at 13.37 pounds, compared to 13.81 pounds on Feb. 7.
(Editing by George Hay and Streisand Neto)
((For previous columns by the author, Reuters customers can
click on DONNELLAN/
Aimee.Donnellan@thomsonreuters.com; Reuters Messaging:
Aimee.Donnellan.thomsonreuters.com@reuters.net))