Packaging giant DS Smith sold to rival for £7.8bn

AMAZON’S cardboard box supplier, DS Smith, has agreed a £7.8bn takeover by a US rival after the suitor emerged victorious in a bidding battle for the company.

Under the all-share deal, Memphis-based International Paper will own around 66.3pc of the combined group, with FTSE 100-listed DS Smith owning the remaining 33.7pc.

It comes after International Paper muscled in on a £5.1bn deal between DS Smith and London-listed rival Mondi that was agreed in principle last month.

International Paper, the world’s largest paper company, will also seek a secondary listing of its shares on the London Stock Exchange following the takeover, which values each DS Smith share at 415p.

Shares of the UK packaging giant were priced at 281p before the first approach by Mondi.

The move will provide a boost to the London stock market, which is struggling to attract initial public offerings amid an exodus of major companies to rival stock markets.

But International Paper warned over back office job cuts across the combined workforce, with around 400 roles so far earmarked as being at risk, though this is subject to a review. It said this was around 0.6pc of the combined work- force worldwide and would focus on “corporate, head office and senior management positions across its and DS Smith’s respective businesses”.

Most affected roles would be in corporate and administrative departments, it said, and come as part of aims to save at least £413m in economies of scale. The companies did not say how many jobs were likely to go in the UK or specifically across DS Smith’s operations.

DS Smith has 4,750 staff in the UK and 30,000 worldwide, while International Paper has about 40,000 employees globally, of which 33,000 are based in the US. International Paper said the enlarged company would be based in its existing Memphis office, though it will keep “key elements” of DS Smith’s headquarters, with plans to base its European HQ at the London site.

The combined group will be led by Andrew Silvernail, International Paper’s incoming chief executive.