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Smurfit Kappa rejects International Paper offer

March 7, 2018  By P&PC Staff

Mar. 6, 2018 – Smurfit Kappa, headquartered in Dublin, Ireland, says it is rejecting an unsolicited acquisition proposal from International Paper Company, headquartered in Memphis, Tenn.

A statement issued by Smurfit Kappa says the board carefully considered the proposal and “believes it is in the best interests of the group’s shareholders and other stakeholders to pursue its future as an independent company.”

According to International Paper, on Feb. 14, 2018, it approached Smurfit Kappa and requested a meeting so it could put forward a specific proposal. Following further communication initiated by International Paper, a meeting was arranged on February 23, and at that meeting, International Paper delivered the proposal and provided a written letter to be delivered to the Smurfit Kappa board of directors. The proposal was reportedly rejected by the Smurfit Kappa board on March 5.


Smurfit Kappa recently announced record EBITDA for 2017 of €1,240 million and a full year ROCE of 15 per cent and said the underlying positive trading conditions have continued into 2018. As part of its year-end results, Smurfit Kappa announced an acceleration of its investment programme based on plans to improve its market position and strengthen its integrated model between 2018 and 2021. Smurfit Kappa describes itself as Europe’s largest producer of paper-based packaging, with 75 per cent of its annual earnings attributed to the European market.

Smurfit Kappa says factors contributing to strong, sustained European demand growth and the emergence of corrugated as a highly sustainable transport and merchandising medium include: the substitution of plastic with paper-based packaging; the significant growth in e-commerce; and growing demand from discount retailers for shelf-ready packaging.

“The proposal fails entirely to reflect the group’s strong growth prospects and attractive industry outlook,” according to the press statement from Smurfit Kappa.

International Paper says that under the terms of the proposal, Smurfit Kappa shareholders would be entitled to receive €22.00 in cash and 0.3028 new International Paper shares of common stock for each Smurfit Kappa ordinary share held by them.

“International Paper believes that the transaction, if consummated, would be an excellent strategic fit that creates long-term value for both Smurfit Kappa and International Paper. The enlarged group would constitute a premier global packaging company that would be able to serve both local and global customers more effectively.  The transaction would also create an opportunity to realize meaningful synergies through enhanced efficiencies,” said the press statement from International Paper.

“Nonetheless, International Paper remains ready to engage with Smurfit Kappa’s board and shareholders to discuss both the merits of its Proposal and the reasons why International Paper believes it provides the best near and long term value for Smurfit Kappa shareholders.”

A global producer of renewable fibre-based packaging, pulp and paper products, International Paper operates manufacturing operations in North America, Latin America, Europe, North Africa, India and Russia, producing corrugated packaging products, pulp for diapers, tissue and other personal hygiene products, and papers for education and communication.

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