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.”