LONDON (ShareCast) - (Sharecast News) - International Paper said on Thursday that it had made "significant progress" in reciprocal due diligence with regards to a potential takeover offer for UK-based DS Smith, and that it could seek a secondary listing in London if a deal goes ahead.
The company - which has until 23 April to either announce a firm intention to make an offer for DS Smith or walk away - said it expects a combination between the two to deliver at least $514m (£407m) of pre-tax cash synergies on an annual run-rate basis.

If the deal goes through, the combined group would be headquartered and domiciled in Memphis, Tennessee, at International Paper's existing headquarters. In addition, it would establish a European headquarters in London, at DS Smith's existing headquarters, and would seek a secondary listing of International Paper shares in London.

It emerged late in March that International Paper was planning to potentially gatecrash DS Smith's agreed £5.1bn merger with London-listed rival Mondi with a £5.7bn bid.

International Paper chairman and chief executive Mark Sutton said on Thursday: "Bringing International Paper together with DS Smith is a logical next step in International Paper's strategy to create value by strengthening our packaging businesses in North America and Europe.

"By combining the strengths of both companies, we believe we can enhance our offering of sustainable packaging solutions for customers in attractive and growing markets."

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