DS Smith to acquire Sweden’s SCA Packaging for $2 billion

UK packaging major DS Smith Plc today said that it will acquire the recycled packaging division of Swedish tissue maker Svenska Cellulosa Aktiebolaget, for €1.6 billion ($2 billion), in order to become a leading supplier of recycled packaging for consumer goods in Europe.

DS Smith, which has Procter & Gamble, Nestle, Kraft, Reckitt Benckiser and Unilever as its clients, plans a rights offering to raise £466 million ($714 million) and use existing and additional debt to finance the acquisition of SCA Packaging.

SCA Packaging is the second largest packaging company in Europe, having facilities in 21 countries, including 109 corrugated manufacturing locations in 20 countries.

For the nine months ended 30 September 2011, SCA Packaging reported net profit of €118.7 million on revenues of €2.65 billion. As on 31 December 2010, SCA Packaging had total assets of €4.16 billion.

Its customers in Germany, Italy and France accounted for 19.7 per cent, 16.5 per cent and 12.7 per cent respectively of its overseas revenue in the 9 months ended 30 September 2011.

FMCG comprise 49 per cent of its customer base for corrugated box products, while the remaining 51 per cent is made up of industrial customers.