The Ireland-based company said it had bought Mondi’s UK corrugated operations- comprising three corrugated box plants for €43m (£38m) on a cash and debt-free basis. The trio of facilities has gross assets worth €60m, said Mondi. Last year, the business reported combined full year EBITDA of €8m (£7.1m), while posting a pre-tax profit of €2m.
Mondi said it would use the €43m proceeds from the sale of its UK corrugated arm to reduce its net debt.
Western Europe restructuring
SKG said also said it had off-loaded its loss-making Western European sack converting assets to Mondi. The division, which consists of 8 plants – four in France, three in Spain and one in Italy – and a number of sales, offices posted an overall pre-tax loss of €12.6m in 2009. Its EBITDA loss was €4.4m.
A statement from SKG confirmed the company would incur exceptional write-offs of €30m on disposal of the sack business – including a net cash cost of €8m.
Gary McGann, Smurfit Kappa Group CEO, said: “We are pleased to announce this asset swap agreement, which further strengthens the group’s leadership in its core corrugated packaging grade, and enhances the efficiency of its integrated system in the increasingly attractive UK market.”
Mondi said today the two-way deal concluded the restructuring its Western European corrugated packaging and recycled containerboard portfolio and would “enable Mondi to refine its geographical footprint around its core corrugated positions in central Europe and Turkey”.
Both deals are conditional on customary completion conditions, said the two companies in separate statements
Credit Suisse analyst Lars Kjellberg told FoodProductionDaily.com that the deal to acquire Mondi’s corrugated operations would consolidate SKG position as UK number two in the corrugated segment but was not a game-changing move for the market.