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DS Smith set for £1.3bn SCA deal

DS Smith has announced plans to buy the packaging division of Swedish firm SCA for £1.3 billion.

The Berkshire-headquartered supplier of recycled packaging has proposed to acquire SCA Packaging excluding the two kraftliner mills.

DS Smith said the move represented a significant opportunity to achieve its stated strategic aim of becoming the leading supplier of recycled packaging for consumer goods in Europe.

The acquisition requires approval from shareholders, and a general meeting will be convened for 3 February.

Regulatory clearance is also required, but DS Smith said it expected the deal to be completed during the second quarter of 2012.

DS Smith group chief executive Miles Roberts said: “This is an exceptional opportunity to create value for shareholders by becoming the leading recycled packaging company across Europe – a company that will be better positioned to deliver even better service and innovation to our strong and growing FMCG customer base.

“SCA Packaging is a well invested business with long positions in recycling and packaging and short paper capacity that is very complementary to our strengths.

“It is a great step in DS Smith’s development and I look forward to working together with the team at SCA Packaging to create an outstanding supplier for our customers and making it a fulfilling place for our staff to work to deliver substantial value for our customers and shareholders.”

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