£722m US deal for packaging giant

PACKAGING giant DS Smith is buying 80pc of Virginiabased firm Interstate Resources, giving it a path into the lucrative US market.

Shares soared 8.4pc to a record high of 481.4p as it announced the £722m deal – its second largest. The FTSE 250 company makes one in four of all packages in UK supermarket trolleys.

Chief executive Miles Roberts said European customers had been asking for help in the US market where he said packaging was less advanced.

The 53-year-old said: ‘We have seen significant customer pull for our innovative packaging solutions in the US and are excited by the opportunity to grow and support our customers’ needs over this large and growing market.’ DS Smith can cut waste by producing packaging that is a better fit and which stacks more neatly on supermarket shelves. Christophe Dupas, global head of packaging procurement for Nestle, backed the deal. He said: ‘Nestle supports DS Smith’s strategy to become a global supplier of corrugated packaging, and this announcement is an important step towards realising that ambition.’

DS Smith has been expanding rapidly, buying four rivals over the past year: the UK’s Creo, Denmark’s Deku-Pack, and Portugal’s P&I Display and Gopaca.

Those purchases helped the company, founded in 1940 as a box-making business in east London, to a 31pc jump in full-year profit to £264m.

Demand also rose among European customers.

Roberts added: ‘Although economic conditions remain uncertain, our innovation-led offering, the scale of our operations, and the momentum in the business gives us confidence in further growth and sustainable returns in the years ahead.’