Mondi to acquire DS Smith to create a massive packaging company

The packaging giant Mondi has reached an agreement to buy competitor DS Smith for £5.14 billion, increasing the group's market worth to almost £10 billion.

DS Smith is valued at around 373p per share in the offer, even though the group's shares were only trading at 350p on Friday.

It stands for a 33% premium over the closing share price of DS Smith on February 7, the day before to the preliminary bid announcement.

Consolidation occurs when the paper packaging sector continues to fall short of its peak due to the pandemic-induced e-commerce boom, with businesses struggling with lower volumes and weaker prices.

The agreement would be an "exciting opportunity to create an industry leader in European paper-based sustainable packaging solutions," according to a statement made by Mondi last month.

54% of the new company will be owned by Mondi stockholders, while Mike Powell, the chief financial officer, and CEO Andrew King will continue in current positions.

(Sources: investing.com, proactiveinvestors.co.uk)