The UK-based recycled paper packaging supplier said today that the deal was “on track” for completion as it declared its intention to become Europe’s unquestioned leader for the material.
It confirmed application had been made to the European Commission for competition clearance on 28 March 2012 and reitierated its prediction to complete the transaction by early summer.
SCA, which announced the planned sell-off on 17 January, said today it had accepted DS Smith´s formal offer to buy-out its French packaging operations following statutory consultations with works councils.
This means both parties have now completely signed off on the deal, said SCA.
DS Smith said the acquisition of the French unit was expected to follow the same timetable as the remainder of SCA Packaging. Completion of this acquisition is scheduled to take place the end of the month – expected to be June.
Miles Roberts, DS Smith chief executive, laid out the company’s ambitious plans once the takeover had been given the green light by competition authorities.
"We expect SCA Packaging to add £2.1 to £2.2bn to our current revenue of £2.5bn starting July 1," he said. “We plan to become the undisputed leading supplier of recycled packaging in Europe.”
Roberts added: “We are delighted with the support for the transaction given to us by our shareholders and I am pleased to report that the process towards completion is on track."
Unsurprisingly, the firm highlighted the completion and integration of its new asset as “key drivers” along with the cost savings it has identified.
“In relation to the proposed acquisition of SCA Packaging, as previously announced, we continue to expect that in the first 12 months of ownership the acquired business (inclusive of synergies) will deliver a return above the Group’s pre-tax cost of capital of 10%,” said DS Smith.