International Paper Gains EU Approval for $7.3 Billion DS Smith Acquisition

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International Paper Gains EU Approval for $7.3 Billion DS Smith Acquisition

International Paper (IP) has received clearance from the European Union for its acquisition of London-based paper and packaging firm DS Smith, valued at approximately $7.3 billion.

As reported by industry sources, IP, headquartered in Memphis, Tennessee, made commitments to divest certain assets to alleviate competition concerns raised by the European Commission, strengthening its footprint in Europe’s paper and packaging sector.

Addressing Competition Concerns

The European Commission noted that the initial deal structure would have disrupted competition in certain markets, particularly affecting the production and supply of corrugated sheets in northern and western Portugal, heavy-duty corrugated sheets in northeastern Spain, and corrugated cases in northwestern France.

The Commission emphasized that the merger would have concentrated market power in specific regions and reduced competitive alternatives, likely leading to higher prices for customers.

Asset Divestment to Maintain Market Balance

To resolve these issues, IP proposed asset divestments on December 20, 2024. The company agreed to relinquish control of five facilities in Europe, including:

  • Two box plants and one sheet plant in Normandy, France

  • A box plant in Ovar, Portugal

  • A box plant in Bilbao, Spain

These divestments were deemed sufficient by the European Commission to address competition concerns. They effectively removed overlapping operations between the two companies in key regions and ensured continued competitive market conditions.

Regulatory Approval and Oversight

The transaction’s approval is contingent upon strict adherence to the agreed commitments. An independent trustee, appointed by the European Commission, will supervise their implementation.

With positive feedback from the review process, the Commission determined that the adjusted acquisition no longer presented any competition issues.

Next Steps

Initially expected to conclude by the end of 2024, the acquisition is now projected to be finalized in the first quarter of this year, pending the completion of regulatory procedures.

IP’s leadership highlighted the strategic importance of this deal, emphasizing that it merges two strong entities and enhances their market position in both North America and Europe. Teams from both companies are actively working on integration efforts.