IP, DS Smith finalize merger

International Paper (IP) has finalized its bid to acquire London-based multinational paper and packaging company DS Smith, as the merger officially took effect Jan. 31 and is estimated to be worth about $7.2 billion.

The combined company has operations in more than 30 countries, including more than 65,000 employees at 200-plus mills and packaging plants in North America and 230-plus in Europe. According to IP, the “new global leader in sustainable packaging solutions” will focus on North American and Europe, Middle East and Africa, or EMEA, markets.

The new IP will maintain North American headquarters in its current hometown of Memphis, Tennessee, while European operations will remain based in London.

"With a stronger portfolio of sustainable packaging solutions, the combination of International Paper and DS Smith enhances our offerings, increases innovation and expands our geographic reach," IP Chair and CEO Andy Silvernail says.

The merger comes after a nearly yearlong journey that included some regulatory hurdles as well as competing interest from other packaging companies.

In early March 2024, DS Smith had reached an agreement to be acquired by English packaging company Mondi before confirming later that month it was in discussions with IP over an all-stock offer.

IP and DS Smith officially agreed to terms of an all-share combination in mid-April, however, reports surfaced claiming Brazilian pulp and paper company Suzano had expressed interest in an all-cash acquisition of IP worth nearly $15 billion. IP remained committed to its merger with DS Smith, and Mondi dropped its offer shortly after.

The IP-DS Smith deal was approved by the companies’ respective shareholders in October 2024. While the merger was expected to take effect later that year, European regulatory hurdles delayed the process.

On Jan. 23, the European Commission approved the concessions offered by IP, clearing the way for the companies to finalize the transaction late last week.

IP agreed to divest five of its sites in Europe: three plants in Normandy, France, including two box plants and one sheet plant; a box plant in Ovar, Portugal; and a box plant in Bilbao, Spain.

The European Commission says these concessions “fully address the competition concerns” by fully removing the overlaps between the companies’ activities in the corrugated box markets in northwest France.

“The commitments also eliminate the overlap as regards the supply of corrugated sheets in the problematic local markets in Portugal and Spain and, as such, any vertical foreclosure concerns regarding corrugated cases,” the European Commission said in a Jan. 23 statement announcing the approval, adding that following “positive feedback,” it concludes the transaction as modified no longer raises competition concerns.

According to a U.S. Securities and Exchange Commission (SEC) filing, IP will issue 0.1285 of new shares of common stock for each ordinary share of DS Smith, resulting in the issuance of approximately 179.8 million new shares of IP common stock.

It also is expected that the new shares of IP common stock will begin trading on the New York Stock Exchange Feb. 4 under the symbol “IP” and shares of IP common stock, including the shares of new IP common stock, will begin trading on the London Stock Exchange via a secondary listing under the symbol “IPC.”

The SEC filing also indicates the company expects to achieve synergies of at least $514 million.

"We will bring together the capabilities and expertise of two experienced teams, with similar cultures to create the global leader in sustainable packaging solutions,” Silvernail says.