UK-based recycled packaging maker, DS Smith, plans to buy Swedish rival SCA Packaging following a €1.6bn deal that will bring together the second and third-biggest players by volume in the European packaging market.
The deal would see DS Smith market share grow to about 14 per cent. Ireland’s Smurfit Kappa, the market leader, has a share of about 17 per cent.
The deal will be subject to regulatory approval and a vote by DS Smith’s shareholders on February 3. According to a report in the FT, DS Smith has spent about a week gauging shareholder support for the acquisition, according to people familiar with the deal, and the company said on Tuesday that it had the backing of Standard Life, which owns 14.6 per cent of its shares.
Shares in DS Smith closed up 3 per cent at 210p, giving it a market capitalisation of £918m.