Smurfit Kappa Rejects Revised International Paper Bid

By Steve Wynne-Jones
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Smurfit Kappa Rejects Revised International Paper Bid

Packaging giant Smurfit Kappa has noted that a revised takeover bid from International Paper ‘fails to value the group’s true intrinsic business worth’, on the back of a ‘record performance’ in 2017.

Smurfit Kappa said that it received a revised bid from International Paper on Thursday last, 22 March, which would see Smurfit Kappa shareholders receive €25.25 in cash and 0.3028 new shares of International Paper common stock for each Smurfit Kappa ordinary share held.

This is approximately 3% higher than the previous bid made by International Paper on 6 March, which was valued at around €8.6 billion.

Unanimously Rejected

Smurfit Kappa’s board ‘unanimously rejected’ the revised proposal, noting that it was ‘resolute in its belief that the best interests of the group’s stakeholders are served by pursuing its future as an independent company’.

It added that the revised proposal ‘fundamentally undervalues’ Smurfit Kappa, noting that there could be ‘challenges’ involved in integrating the two businesses, given that both operate ‘fundamentally different cultures’.


“On 6 March, the board of Smurfit Kappa unanimously rejected International Paper’s unsolicited and highly opportunistic proposal,” said Liam O’Mahony, chairman of Smurfit Kappa.

“The revised proposal does not offer Smurfit Kappa shareholders much more than compensation for the fall in International Paper’s share price since that date, and again entirely fails to value the group’s true intrinsic business worth and future prospects. We delivered a record performance in 2017, and underlying trading momentum has continued into 2018,” O’Mahony added.

Strategic Sense

Smurfit Kappa added that the revised proposal ‘does not make strategic sense’, with the group having recently announced a ‘a strong plan to accelerate development and performance’ following its year-end results.

In February, Smurfit Kappa reported revenue of €8.56 billion in its 2017 full-year results. The group’s operating profit fell by 12%, to €576 million.


Were International Paper to acquire Smurfit Kappa, it would become the number-one packaging manufacturer in Europe. Smurfit Kappa previously described the US group's bid to take over the company as 'fundamentally opportunistic'.

© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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