DS Smith gets EU clearance for Europac acquisition
By Michele Maatouk
Date: Wednesday 14 Nov 2018
(Sharecast News) - The European Commission has cleared packaging group DS Smith's proposed acquisition of Spanish rival Europac, which was announced back in June.
As part of the clearance, the London-listed company has agreed to dispose of production plants in Portugal and France. DS Smith said the financial impact of these disposals is not material.
The group will sell off Europac's box plant in Ovar, Portugal and two DS Smith plants in France that produce corrugated sheets and cases for supply in Western France.
The European Commission said in a statement: "These commitments fully remove the overlap between DS Smith and Europac with regard to corrugated cases in Western France. The commitments also largely eliminate the overlap as regards the supply of corrugated sheets in Portugal and as such any foreclosure concerns with regard to corrugated cases, so that the transaction will only result in a limited increment in market share of less than 5%.
"The Commission therefore concluded that the proposed transaction, as modified by the commitments, would no longer raise competition concerns in the EEA. The decision is conditional upon full compliance with the commitments."
The company expects the offer documentation to be posted to shareholders of Europac shortly, with completion due by the end of the year.
Chief executive Miles Roberts said: "I am delighted that we have received competition clearance from the European Commission. This is an important milestone in our acquisition of Europac. We look forward to completing the formal takeover process and integrating Europac into DS Smith to the benefit of all our stakeholders.
"This acquisition is a fantastic opportunity to enhance our customer coverage and offering in this important region."
Europac delivered revenues of €868m in 2017 and had recurring earnings before interest, taxes, depreciation and amortisation of €147m. In the first nine months of this year, recurring EBITDA was €157m and net profit was €79m, compared to €104m and €58m in the same period last year.
At 1500 GMT, the shares were up 0.5% to 353.30p.
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