In major news on UK stocks, DS Smith PLC (GB:SMDS) has agreed to the takeover offer of U.S.-based manufacturing company, International Paper (NYSE:IP), rejecting Mondi PLC’s (GB:MNDI) bid. DS Smith shares were trading down by 2% as of writing. Over the last two months, DS Smith stock has gained over 40% over the potential takeover interest, followed by a bidding war between Mondi and International Paper.
DS Smith is a multinational company known for its innovative and sustainable packaging solutions and recycling services. Meanwhile, International Paper is a leading U.S.-based pulp and paper company with a significant global presence.
Synergies in DS Smith-International Paper Merger
This DS Smith-International Paper deal will enable the combined company to establish itself as a leader in sustainable packaging solutions globally, with a strong focus on the thriving North American and European markets. The combined business will also benefit from the complementary business models of the two companies, including plants, mills, and supply chains. Further, the combined entity will generate pre-tax cash synergies of at least $514 million annually by the end of the fourth year following its completion.
The deal is anticipated to be finalized by the fourth quarter of 2024.
As per the terms of the agreement, each DS Smith share will be valued at 415p per share, with International Paper issuing 0.1285 shares for each DS Smith share. Following the completion, DS Smith shareholders would have about 33.7% ownership, with IP shareholders owning the remaining stake in the merged entity. The combined company also intends to pursue a secondary listing in London.
What is the Target Price for DS Smith?
According to TipRanks’ consensus, SMDS stock has received a Moderate Buy rating, backed by two Buy recommendations. The DS Smith share price forecast is 402.50p, which is almost similar to the current trading levels.
