Mondi and DS Smith discuss a possible merger to create a group with nearly €17 billion in turnover

On March 8, Mondi and DS Smith announced “they have reached an agreement in principle on the key financial terms of a possible all share offer by Mondi on DS Smith.” However, no firm offer had been submitted by Mondi, the deadline being set for April 4. If this operation materializes, Mondi shareholders would hold 54% of the capital of the new group and those of DS Smith 46%. On February 8, Mondi indicated that this transaction represented “an exciting opportunity to create an industry leader in European paper-based sustainable packaging solutions.” Particularly highlighted are the expected benefits of reinforced vertical integration, synergies, as well as strong geographic and production complementarity, particularly in corrugated case materials (CCM, virgin and recycled fiber base) or flexible packaging. If the transaction goes through, Philip Yea, Andrew King and Mike Powell would retain, respectively, their positions as president, CEO and CFO of the new group, while three non-executive directors of DS Smith would join the Board of Directors.

In its last fiscal year ending in April 2023, DS Smith achieved a turnover of £8.2 billion (~€9.6 billion) with some 30,000 people. For its part, in 2023, Mondi recorded a turnover of €7.3 billion with 22,000 people. If it is confirmed, this merger would take place in the wake of another big deal announced a few months ago, and still in progress, between WestRock and Smurfit Kappa which would allow this new group to be at the head of a cumulative turnover of some 34 Billion $.

Valérie Lechiffre