International Paper to acquire DS Smith in transaction valued at $9.9B

International Paper and DS Smith announced that they have reached agreement on the terms of a recommended all-share combination, creating a global sustainable packaging solutions company. The terms of the combination value each DS Smith share at 415 pence per share, and will result in IP issuing 0.1285 shares for each DS Smith share, resulting in pro forma ownership of 66.3% for IP shareholders and 33.7% for DS Smith shareholders, implying a transaction value of approximately $9.9B. The combination is expected to close by the fourth quarter. The acquisition is expected to deliver at least $514M of pre-tax cash synergies on an annual run-rate basis by the end of the fourth year following the close of the combination. The combination will be structured as an acquisition of DS Smith by IP and implemented in accordance with the rules of the Code and English law. IP will issue 0.1285 for each DS Smith share, equal to 179,948,967 shares. Upon completion of the combination, any new IP shares issued to DS Smith shareholders will be authorized for primary listing on the New York Stock Exchange subject to official notice of issuance. IP also intends to seek a secondary listing of its shares on the London Stock Exchange. The combination is expected to close by the fourth quarter, subject to IP and DS Smith shareholder approval and customary closing conditions, including receipt of regulatory clearances, in Europe and the U.S. Andrew Silvernail will be CEO of the combined company and Miles Roberts will be retained as a consultant to assist with integration matters. As part of the combination, up to two non-executive directors of DS Smith will be invited to join the board of the combined company upon close of the combination. The combined company will be headquartered in Memphis, Tennessee, with plans to establish an EMEA headquarters at DS Smith’s existing London headquarters.