Packaging giant Mondi expands in Western Europe with £634m acquisition

London-listed packaging giant Mondi is to expand in Western Europe after closing a €634 million deal with Schumacher Packaging.

This follows Mondi’s abandoned takeover bid for London-listed rival DS Smith, which will instead be acquired by US rival International Paper.

Mondi told investors on Wednesday that it would acquire Schumacher’s operations in Germany, Benelux and the United Kingdom, comprising seven corrugated converting plants, two solid board mills and four solid board converting plants.

The group highlighted Europe’s largest packaging market, Germany, and Mondi’s expansion into the country will give it access to “a wider range of customers as they increasingly transition towards more sustainable packaging solutions.”

Schumacher’s packaging assets in Western Europe generated adjusted profits before unpleasant problems of €66 million last year, but Mondi expects the contribution to increase thanks to recently added capacity and cost synergies.

However, the cost savings will require a planned one-off cash expenditure of approximately €18 million.

Group co-CEOs Bjoern and Hendrik Schumacher will join Mondi’s Western European operations in key roles.

mondi shares They rose 4.5 per cent to lead the FTSE 100 on Wednesday afternoon.

Andrew King, head of Mondi: ‘Our goal is to invest to meet the growing market demand for sustainable packaging while creating value for our stakeholders.

“This acquisition significantly increases our corrugated converting capacity, extends our reach in Western Europe and offers strong downstream integration opportunities, while expanding our offering to customers with a complementary range of fibre-based products.”