Wrapped up: British packaging giant DS Smith is set to leave the FTSE100 after agreeing a £5.8bn takeover by a US rival
DS Smith has agreed a £5.8billion takeover by an American rival.
The proposed tie-up with American firm International Paper would see the British packaging giant leave the FTSE 100 index.
But the combined group would seek a secondary listing in the UK meaning DS Smith would not entirely disappear from London’s stock market. The deal comes amid an exodus from the London exchange as foreign bidders seek to buy up UK companies on the cheap while other firms switch their listings from the City to other hubs such as New York.
DS Smith’s board recommended the offer from Tennessee-based International Paper after a bidding war.
The US giant beat an earlier £5.1billion bid from DS Smith’s fellow London-listed packaging group Mondi. Surrey-based Mondi must decide whether to make a counter offer.
International Paper yesterday confirmed it will seek a secondary listing on the London Stock Exchange as part of the deal, as revealed by the Mail last month.
That means shares in the company will still be traded on London’s stock market though not on the FTSE 100.
It will ‘help facilitate current DS Smith shareholders to remain invested in the combined company alongside some potential benefits of a primary listing on the New York Stock Exchange’, it said.
DS Smith was founded in east London in 1940 and started out as a family-run box-making business. The firm employs more than 30,000 workers across 30 countries.
It makes cardboard boxes and products such as trays to carry cans and bottles and packaging for food.
