Smurfit and Kappa to merge

PPI, Oct 2005

IRELAND / NETHERLANDS

Jefferson Smurfit Group and Kappa Packaging have announced plans to join ι forces. The merged entity would be named Smurfit Kappa Group and would become the largest containerboard producer in western Europe, with a 21.7% share of the market, according to RISI. Smurfit is currently the leader with 13%, followed by SCA on 12% and Kappa on 8.7%.

The link-up would give the packaging giants a joint capacity of 6.1 million tonnes/yr of containerboard and 5.1 million tonnes/yr of corrugated board. The workforce would total 43,000 people, with operations spanning 23 European and nine Latin American countries. In 2004, the Dutch and Irish groups generated total revenues of Euro 7.6 billion ($9.4 billion).

Under the merger agreement, Smurfit's existing shareholders would own 58.3% of the combined company, leaving Kappa's the remaining 41.7%. The merger is subject to a number of conditions, including approval from the European Union competition authorities.