Bottom line: British packaging giant DS Smith is set to exit the FTSE100 after agreeing a £5.8bn takeover by a US rival.
DS Smith has agreed a £5.8bn takeover by a US rival.
The proposed partnership with US company International Paper would see the British packaging giant drop out of the FTSE 100 index.
But the combined group would seek a secondary listing in the UK, meaning DS Smith would not disappear from the London stock market entirely. The deal comes amid an exodus from the London Stock Exchange as foreign bidders look to buy UK companies on the cheap, while other companies shift their listings from the City to other centers such as New York.
DS Smith’s board of directors recommended Tennessee-based International Paper’s bid after a bidding war.
The US giant beat an earlier £5.1bn bid from DS Smith’s London-listed packaging group Mondi. Surrey-based Mondi must decide whether to make a counteroffer.
International Paper confirmed yesterday that it will seek a secondary listing on the London Stock Exchange as part of the deal, as the Mail revealed last month.
This means the company’s shares will continue to be listed on the London Stock Exchange, although not on the FTSE 100.
“It will help facilitate existing DS Smith shareholders to continue investing in the combined company along with some potential benefits of a primary listing on the New York Stock Exchange,” he said.
DS Smith was founded in East London in 1940 and began as a family-owned box manufacturing business. The company employs more than 30,000 workers in 30 countries.
It manufactures cardboard boxes and products such as trays for transporting cans and bottles and food containers.
