The Boards of Mondi and DS Smith announced that they have reached an agreement in principle on the key financial terms of a possible all share offer by Mondi for DS Smith, pursuant to which Mondi would acquire the entire issued and to be issued share capital of DS Smith.
Mondi shareholders would own 54% and DS Smith shareholders would own 46% of the issued and to be issued share capital of Mondi.
Philip Yea would be Chair, Andrew King would be the Chief Executive Officer and Mike Powell would be the Chief Financial Officer of the enlarged Mondi Group. Three Non-Executive Directors of DS Smith are expected to join the enlarged Mondi Group Board.
In reaching agreement in principle on the key terms, both Boards have taken into account the substantial synergies which they believe would arise from combining the two pan-European companies, and the consequent significant added value which should accrue to shareholders in the Combination.
These synergies are expected to result from vertical integration alongside highly complementary positions and expertise in containerboard, corrugated solutions and flexible packaging, as well as expected benefits from economies of scale and efficiencies across a combined supply chain and administration.
Mondi and DS Smith are currently undertaking an exercise to validate the quantity of synergies which they believe will arise from the combination and intend to publish their estimated quantity of any synergies together with the reports required under the Code in due course.
Extension of the PUSU deadline
In accordance with Rule 2.6(a) of the Code, Mondi was required, by not later than 5.00 p.m. on 7 March 2024, either to announce a firm intention to make an offer for DS Smith in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies.
In accordance with Rule 2.6(c) of the Code, the DS Smith Board has requested that the Panel on Takeovers and Mergers (the "Panel") extends the relevant deadline, as referred to above, to enable the parties to continue their discussions regarding the Combination. In light of this request, an extension has been granted by the Panel and Mondi must, by not later than 5.00 p.m. on 4 April 2024, either announce a firm intention to make an offer for DS Smith in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer for DS Smith, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline will only be extended with the consent of the Panel in accordance with Rule 2.6(c) of the Code.
There can be no certainty that any firm offer will be made. This announcement has been made with the consent of each of Mondi and DS Smith.
Headquartered in London, DS Smith is a leading provider of sustainable fiber-based packaging worldwide, which is supported by recycling and papermaking operations.
Mondi is a global leader in packaging and paper.
