Home Money Mondi pulls out of a potential bidding war to buy rival packaging giant DS Smith, opening the door for the US company

Mondi pulls out of a potential bidding war to buy rival packaging giant DS Smith, opening the door for the US company

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Change of mind: Mondi had previously offered to buy DS Smith for £5.2bn, but was outbid by the American group.

Mondi has pulled out of a potential bidding war to buy a rival packaging giant, opening the door for an American company.

The Surrey-based company said yesterday it will not make a counter-offer after DS Smith’s board recommended a £5.8bn takeover bid from US company International Paper. Mondi had previously offered to buy DS Smith for £5.2bn but was outbid by the US group.

A Mondi spokesperson said: “Following a period of due diligence and after carefully considering the value that the combination with DS Smith would bring to shareholders, the board has decided that the transaction would not be in the best interests of its shareholders. Therefore Therefore, Mondi has no intention of making any offer.’

Change of mind: Mondi had previously offered to buy DS Smith for £5.2bn, but was outbid by the American group.

The decision clears the way for the International Paper deal to move forward without a bidding war. A partnership with the Tennessee-based company would see DS Smith drop out of the FTSE 100 index of blue-chip companies.

But the combined group would seek a secondary listing in the UK, meaning DS Smith would not disappear from the London stock market entirely.

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