International Paper Company (NYSE:IP), based in Memphis, has completed its acquisition of DS Smith, officially marking January 31, 2025, as the date the two companies merged to form a new global leader in sustainable packaging.
This $7.2 billion merger brings together two of the industry’s foremost producers of sustainable packaging solutions and containerboard products, significantly increasing their combined global footprint. With operations across more than 30 countries worldwide, the new entity boasts over 65,000 employees, positioning itself as a formidable player focused on the North American and EMEA regions.
Andy Silvernail, the Chairman and CEO of International Paper, expressed optimism about the merger's potential during the official announcement. He stated, “With a stronger portfolio of sustainable packaging solutions, the combination of International Paper and DS Smith enhances our offerings, increases innovation, and expands our geographic reach.” This sentiment reflects the strategic goals of both firms as they aim to build on each other’s strengths.
The merger arrived after nearly a year-long negotiation process marked by competitive interest and regulatory hurdles. Notably, during the negotiations, DS Smith initially accepted an acquisition offer from Mondi, another packaging company. Eventually, discussions shifted to focus on the all-share offer presented by International Paper, which gathered momentum throughout 2024.
Despite interest from other companies, including Brazilian pulp and paper giant Suzano—who made moves for IP with cash offers worth approximately $15 billion—the management at International Paper remained steadfastly committed to acquiring DS Smith. The deal garnered final approval from IP and DS Smith shareholders by October 2024, but delays emerged due to European regulatory concerns.
On January 23, 2025, the European Commission granted approval after International Paper agreed to divest five of its sites across Europe, consisting of three plants located in Normandy, France, as well as additional facilities based in Spain and Portugal. The Commission noted, “The commitments also eliminate the overlap as regards the supply of corrugated sheets in the problematic local markets,” ensuring the merger aligned with regulatory standards.
With the acquisition finalized, trading of the new International Paper shares is expected to commence on February 4, with shares expected to be listed under the ticker symbol “IP” on the New York Stock Exchange and “IPC” on the London Stock Exchange. This strategic move not only reflects the confidence of International Paper's leadership but sets the stage for the company's ambitious growth plan.
“We will bring together the capabilities and expertise of two experienced teams, with similar cultures to create the global leader in sustainable packaging solutions,” Silvernail emphasized. The merger aims to link the best elements of each company to create superior service, innovation, and sustainability initiatives. By combining their efforts, the merged company anticipates substantial improvements in customer experience, as its workforce will collaborate under the shared mission of sustainable practices.
International Paper and DS Smith have positioned themselves at the forefront of sustainability, aiming to be diligent stewards of the environment. This merger is not just about financial growth; it also highlights the growing importance of sustainable business practices and how companies pioneer new ideas within the packaging industry.
The newly formed entity will leverage enhanced innovation capabilities to develop groundbreaking sustainable packaging solutions. By optimizing its operations and resources, International Paper and DS Smith anticipate heightened efficiency and responsiveness to market demands.
With the combined resources and talents of both companies, industry experts expect the merger to drive profitability and lead the way for more sustainable practices within the packaging sector. By integrating their strengths, they aim to meet the increasing demand for sustainable solutions globally.
International Paper's acquisition of DS Smith serves as a clear message about the future direction of the packaging industry, emphasizing sustainability and innovation. Going forward, stakeholders and customers alike will be closely monitoring the early stages of this merger to see how it influences the market dynamics and the companies’ long-term strategic goals.