UK's Mondi bets on Western Europe with $695 mln deal for Schumacher Packaging's assets
Corrects paragraph 4 to clarify that Smurfit has closed the deal to buy Westrock
Oct 9 (Reuters) -British paper and packaging firm Mondi MNDI.L has agreed to buy the German, Benelux and UK packaging assets of Schumacher Packaging for 634 million euros ($695.6 million), including debt, to expand in Western Europe, it said on Wednesday.
WHY IT'S IMPORTANT
There has been increasing consolidation in the paper and packaging sector as companies recover from a decline in demand due to customer destocking following a boom in packaging sales during the pandemic.
Firms such as Mondi are looking to expand their footprint in Europe. Earlier this year, it dropped out of a takeover bid for rival DS Smith SMDS.L after U.S. peer International Paper Co IP.N outbid it.
Ireland's Smurfit Kappa boughtU.S. rival Westrock in July to create Smurfit Westrock SWR.L.
KEY QUOTES
"This acquisition significantly increases our corrugated converting capacity, extends our reach across Western Europe, and offers strong downstream integration opportunities," Mondi CEO Andrew King said in a statement.
WHAT'S NEXT?
Mondi said the deal is expected to add to its earnings in the first full year after the deal close, which is expected in the first-half of 2025.
The London-listed firm will report its third-quarter trading update on Oct. 17, as planned, it said.
($1 = 0.9114 euros)
Reporting by Yadarisa Shabong in Bengaluru; Editing by Sonia Cheema
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