Mondi PLC and DS Smith PLC have reached an agreement in principle for a possible all-share offer by Mondi for DS Smith. The key financial terms include Mondi shareholders owning 54% and DS Smith shareholders owning 46% of the issued and to be issued share capital of Mondi. The terms represent an implied value of 373 pence per DS Smith share, with a premium of 33% to DS Smith's closing share price on 7 February 2024. The combination aims to create a pan-European industry leader in paper-based sustainable packaging solutions, with compelling strategic and financial rationale for both sets of shareholders. It is expected to bring substantial benefits to shareholders, customers, employees, and related stakeholders.
The combination is seen as an opportunity to increase exposure to sustainable packaging trends, create a leading player in corrugated packaging across Europe, and deliver substantial benefits to respective shareholders, customers, and employees. The companies expect significant value creation from substantial synergies, with the exercise to validate the quantity of synergies currently underway. The extension of the PUSU deadline provides more time for the companies to finalize the terms and conditions of any offer, including regulatory matters and mutual confirmatory due diligence.