LONDON (ShareCast) - (Sharecast News) - Smurfit Kappa has completed the acquisition of Netherlands-based paper and recycling business Reparenco for €460m.
The FTSE 100 group sees a "strong strategic fit" for its existing European businesses, which is expected to deliver more than €30m of synergies.

Reparenco adds 405,000 tonnes of recycled containerboard capacity to Smurfit's system and a high-quality graphic paper machine that the company sees as being "very well positioned" in its market.

Smurfit's intention is to continue to produce graphic paper for our customers for the foreseeable future, though the machine offers the potential for conversion to containerboard over the medium-term.

"The 750,000 tonne recycling operation increases our security and quality of raw material supply and also ensures we can provide our customers with greater certainty about the quality and performance of our products," Smurfit said.

"Reparenco represents early delivery of a central element of our Medium Term Plan - to increase our European recycled containerboard capacity," said Saverio Mayer, Smurfit's European chief executive.

"It is ideally situated in our core European operating region where we continue to see strong demand driven by growth in e-commerce and increased substitution of plastic with paper-based packaging. The mill is also very well placed on the cost curve and specialises in producing basis weights from 80 to 120 grams which caters for the market's growing demand for lighter-weight materials."

Last month, the group launched an offering of €500m of euro denominated senior notes due 2026 to pay for the deal and with any remaining net proceeds used for general corporate purposes, such as repaying existing debt.

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