The British packaging manufacturer Mondi has abandoned the purchase of DS Smith, the owner of the packaging factory in Belišće, Kaplast from Vojnić, and Unijapapir from Zagreb, after this company agreed to a deal worth £5.8 billion, or €6.74 billion, with the American International Paper.
Although Mondi wanted to buy DS Smith at a value of £3.73 per share, which would result in shareholders of this British giant owning 54 percent of the expanded group, the plan has fallen through. When asked ‘why?’, the British company responded that the transaction ‘would not be in the best interest of shareholders,’ Reuters reports, and shortly after the announcement, Mondi’s shares jumped by eight percent on the London FTSE 100 index while DS Smith’s shares fell by 11 percent.
DS Smith’s shares have risen by more than 45 percent since Mondi first announced its interest in acquiring this company in early February, and then reached a preliminary agreement to purchase the owner of Croatian factories for £5.14 billion in March.
International Paper made a higher counteroffer at the end of last month, seeking to expand its European presence and strengthen its position as the world’s leading paper and packaging company by revenue. The US-based company stated that it would seek a secondary listing of shares of the combined group in London as part of the agreement, joining companies like Mondi and Smurfit Kappa in the challenging European market.
At the end of last year, Irish Smurfit Kappa agreed to buy its American rival WestRock for $11 billion, and this acquisition is expected to be completed in July.
The agreement between International Paper and DS Smith, which considers Northern and Southern Europe its largest markets, is expected to be concluded in the fourth quarter of this year, subject to shareholder and regulatory approval.
It is worth noting that paper packaging manufacturers faced difficulties last year due to weak demand and low prices. Clients were depleting stocks accumulated during the boom of electronic commerce, driven by the pandemic. What will happen next with the owner of Croatian factories remains to be seen, but Mondi will not come to Croatia.
