
Katsiaryna | stock.adobe.com
International Paper (IP) has officially secured clearance from the European Union for its nearly $7.3 billion bid to acquire London-based paper and packaging company DS Smith.
In a move initially reported by Reuters, Memphis, Tennessee-based IP has pledged to sell certain assets to address competition concerns from the European Commission, aiming to boost its European presence in the paper and packaging industry.
In a news release announcing the approval, the European Commission says the transaction, as initially notified, would have reduced competition in the markets for the manufacture and supply of corrugated sheets in the north and west of Portugal, heavy-duty corrugated sheets in northeast Spain and corrugated cases in northwest France.
“Notably, the commission found that the transaction would have resulted in high combined shares, as well as high concentration levels, in several local markets,” the European Commission states in the news release. “The commission also found that, after the merger, there would not be enough alternative competitors to exert sufficient competitive pressure on the merged entity. This would have led to higher prices for consumers in the affected markets.”
IP offered its concessions to the European Commission on Dec. 20, 2024.
The company has 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 says, adding that following “positive feedback,” it concludes the transaction as modified no longer raises competition concerns.
The decision is conditional upon full compliance with the commitments, and under the supervision of the European Commission, an independent trustee will monitor their implementation.
Initially, IP expected to close the deal in the fourth quarter of 2024, but with the ongoing regulatory process, expects to finalize the bid in the first quarter of this year.
“We are very excited to complete the DS Smith acquisition,” IP CEO Andy Silvernail said during the company’s earnings call Oct. 31, 2024. “We are bringing together two great organizations and building winning positions in the attractive markets of North America and Europe. … Our teams are actively involved in planning for the integration."Latest from Recycling Today
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