Smurfit Kappa approached for £6 billion takeover

Monday, Apr 13, 2015

Irish paper packaging manufacturer Smurfit Kappa is alleged to have been approached by International Paper for a potential takeover

International Paper is said to be working on a potential £6bn-plus takeover bid for Irish packaging company Smurfit Kappa.
The US rival is believed to have held talks with Deutsche Bank (Xetra: 514000 - news) advisers over making a bid for the Dublin-based firm, which is also listed in London and specialises in corrugated paper-based packaging.

Smurfit, which had revenues of £5.8bn in 2014, is Europe’s largest paper-packaging supplier. The company’s equity could be valued at more than £6bn in the event of a takeover bid from International Paper, which has a market capitalisation of nearly £16.4bn.

The proposition is the latest in a series of high-profile takeovers, including Shell’s £47bn acquisition of BG the largest deal between two British companies so far. The deal will create a £200bn oil and gas giant, and is the biggest takeover in the sector for 17 years. Heinz is also set to merge with Kraft to create the fifth biggest food company in the world, known as The Kraft Heinz Company, in a deal worth $68.3bn.

Gary McGann, chief executive of Smurfit, said late last year that the company would consider moving from Ireland (Other OTC: IRLD - news) to the UK in order to qualify for the FTSE 100 index.

“In market capitalisation terms, we would be outside the FTSE 100 at the moment,” he said at the time. “If we were to try to calculate where we would be, we would be about 120th.

“I think we would have to consider it [taking a main London listing] if we could get into the FTSE 100.

“There’s no particular merit in us moving right now, even though some players would say to us: ‘Why don’t you list in London?’ ”

Memphis-based International Paper announced its intention last month to invest $135m to convert a mill in North Carolina to softwood pulp and fluff production used in nappies resulting in numerous job losses.

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