Smurfit Kappa rejects International Paper buy-out

By Jenny Eagle

- Last updated on GMT

Smurfit Kappa at drinktec last year. Photo: Smurfit Kappa.
Smurfit Kappa at drinktec last year. Photo: Smurfit Kappa.
Smurfit Kappa has rejected a buy-out from International Paper Company (IP) because: ‘it fails to reflect the Group’s superior prospects as an independent business and represents a valuation multiple significantly below recent comparable transactions’.

IP confirmed it submitted a proposal to acquire Smurfit Kappa for approximately €8.6bn, providing shareholders with a shareholding of approximately 15% on February 23, 2018.

No action

The Board of Smurfit Kappa has already carefully considered, with its financial advisers, the Proposal in detail and has unanimously rejected it on the basis that Shareholders are strongly advised to take no action​,” said Michael O'Riordan, company secretary, Smurfit Kappa, in a statement.

This announcement is made without the consent of International Paper.


  • February 14, 2018​, International Paper approached Smurfit Kappa and requested a meeting to put forward a proposal.
  • February 23, 2018​, International Paper delivered the Proposal and provided a written letter to be delivered to the Smurfit Kappa board of directors.
  • March 5, 2018​, the Proposal was rejected by the Smurfit Kappa Board.

There can be no certainty that any firm offer will be made, nor any certainty as to the terms on which any firm offer might be made by International Paper​.”

International Paper notes the comments that Smurfit Kappa believes the Proposal is highly opportunistic.

It said: ‘Given that Smurfit Kappa announced record EBITDA on February 7, 2018 and recorded an all-time high share price of €29.76 on February 20, 2018, International Paper does not agree with this characterisation.

‘Indeed, by submitting the Proposal after the release of Smurfit Kappa's Full Year Results and the Medium term Outlook (MTO), International Paper was able to take account of this information (and the market's reaction to it) when making its approach.

‘Moreover, International Paper believes the Proposal provides Smurfit Kappa shareholders with the opportunity to crystalize value for their holdings in the near term (via the Proposal's cash component) and retain ongoing upside in the value creation of the transaction (via the Proposal's share component).’

'Excellent strategic fit'

IP said it believes the transaction, if consummated, would be an excellent strategic fit that creates long-term value for both Smurfit Kappa and International Paper. 

It claims the enlarged group would constitute a ‘premier global packaging company’ that would be able to serve both local and global customers more effectively. 

The transaction would also create an opportunity to realise meaningful synergies through enhanced efficiencies.

In a statement the company said: “International Paper is disappointed that this (announcement) was made public, prior to further engagement between the parties to discuss the value creation potential of the transaction​.

Nonetheless, International Paper remains ready to engage with Smurfit Kappa's Board and shareholders to discuss both the merits of its Proposal and the reasons why International Paper believes it provides the best near and long term value for Smurfit Kappa shareholders​.” 

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