London-listed packaging giant Mondi is set to expand in Western Europe after striking a €634million deal with Schumacher Packaging.
It follows Mondi’s abandoned takeover bid for London-listed rival DS Smith, which is set to be acquired instead by American rival International Paper.
Mondi told investors on Wednesday it would acquire Schumacher’s German, Benelux and UK operations, comprising seven corrugated converting plants, two solid board mills and four solid board converting plants.
Co-chief executives, Bjoern and Hendrik Schumacher, will join Mondi’s Western Europe operations in key roles.
The group highlighted Europe’s largest packaging market of Germany, with Mondi’s expansion in the country set to give it access to ‘a wider array of customers as they increasingly transition towards more sustainable packaging solutions’.
Schumacher’s Western European packaging assets delivered adjusted earnings before nasties of €66million last year, but Mondi expects the contribution to increase on the back of recently added capacity and cost synergies.
However, cost savings will take an expected one-off cash spend of approximately €18million.
The group’s co-chief executives, Bjoern and Hendrik Schumacher, will join Mondi’s Western Europe operations in key roles.
Mondi shares were up 4.5 per cent to lead the FTSE 100 on Wednesday afternoon.
Mondi boss Andrew King: ‘Our focus is on investing to meet the growing market demand for sustainable packaging while driving value for our stakeholders.
‘This acquisition significantly increases our corrugated converting capacity, extends our reach across Western Europe, and offers strong downstream integration opportunities, while broadening our customer offering with a complementary fibre-based product range.’
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