Paper Manufacturers Shift Grades – April 2024 M&A Activity

In a classic bidding war that played out in the public markets, International Paper announced that it had prevailed over Mondi in the competition to land DS Smith. It was an about-face for the London-based DS Smith company. The Mondi and DS Smith boards were confident they had arrived at a final price and structure. In early March, they jointly announced an agreement for Mondi to acquire DS Smith in an all-share offer.

Less than three weeks after the deal with Mondi was announced, US-based International Paper came roaring out of the sidelines and pushed Mondi out of the way with a stock-exchange offer for DS Smith valued at $7.2 billion. This deal is just one of many over the past several years as the paper industry sorts itself out, reduces its reliance on printing papers, and shifts to packaging grades. (For more, see: The Target Report: Paper Industry in Transition – May 2022.)

DS Smith – A Path to Corrugated

DS Smith is a London-based packaging company focused on manufacturing corrugated cartons. Founded in 1940 by David Solomon Smith and his cousin, the company originally started as a manufacturer of folding cartons. In what was a propitious decision at the time, the company specialized in the production of cigarette cartons for the British-American and Imperial Tobacco companies. As war raged in the skies over London and across the channel in Europe, as evidenced by pictures of British pilots and American GIs from the time, packaged cigarettes were in high demand and ample supply.