On 24 January, the European Commission cleared, under the EU Merger Regulation, the proposed acquisition of DS Smith by International Paper (IP). However, the clearance is subject to full compliance with the commitments offered by the parties. The Commission’s investigation showed that the transaction, as initially notified, would have reduced competition in the markets for the manufacture and supply of: corrugated sheets in northern and western Portugal; heavy-duty corrugated sheets in north-eastern Spain; and corrugated boxes in north-western France. In particular, the Commission found that the transaction would have generated high combined market shares and a high concentration in several local markets. It also found that, following the merger, there would not have been enough other competitors to exert sufficient competitive pressure on the merged entity. For consumers, this would have led to higher prices in the affected markets.
To address these concerns, the parties have proposed to divest five International Paper mills in Europe: three mills in Normandy, France (Saint-Amand-Villages, Mortagne and Cabourg), one mill in Ovar (Portugal) and one in Bilbao (Spain).
The Commission will subsequently approve the appropriate purchaser(s) of the divested businesses. Following the positive feedback received during the market test, the Commission concluded that the transaction, as modified by the commitments, would no longer raise competition concerns. The decision is subject to full compliance with the commitments. Under the supervision of the Commission, an independent trustee will monitor their implementation.
“Although we would have preferred to retain the selected sites as part of our portfolio, they are enabling sites and we are confident that we will find a suitable buyer, said Andrew Silvernail, CEO of International Paper. We are very pleased to have reached this important milestone in our acquisition of DS Smith. This combination will create a global leader in sustainable packaging solutions, focused on the attractive and growing North American and EMEA regions.”
In April 2024, International Paper announced the acquisition for £5.8 billion (€6.8 billion).
V. L.
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