DS Smith eyes European domination as it completes SCA Packaging takeover

The transaction sees the UK-based company acquire Europe’s second largest packaging outfit which emp…

DS Smith said closing the deal represented “a significant opportunity” for it to meet it key strategic goal of “becoming the leading supplier of recycled packaging for consumer goods in Europe”.

Geographical reach and cost savings

Providing access to new geographical markets and significant cost synergies are two of the major benefits highlighted by the company.

It estimated the buyout would deliver savings of at least €115m a year. The firm said these would be broken down into pre-tax cost savings from procurement and operational efficiencies of at least €75m and cumulative capital expenditure and working capital benefits of at least €40m annually.

The savings would be seen by the end of the third full financial year following purchase, said the company.

Group chief executive Miles Roberts said: “The SCA Packaging business is very complementary to DS Smith’s strengths and creates a significantly enlarged geographic footprint. Together, we are now better positioned to meet the needs of our pan-European customers, deliver higher standards of customer service and drive forward product innovation."

He added that the integration process of the two companies would begin immediately – thanks to a detailed strategy that has been ready since the deal was unveiled at the start of this year.

Under the terms of the deal, DS Smith has acquired SCA’s entire packaging division – excluding two kraftliner mills in Sweden which the Scandinavian firm said were well integrated into its forest products operations.