DS Smith Negotiating to Acquire French Corrugated Packaging Firm

The board of directors for DS Smith has entered into exclusive discussions in regards to acquiring Otor SA, a corrugated container manufacturer based in France, from The Carlyle Group. If successful, DS Smith would own more than 95 percent of the share capital and voting rights of Otor.

DS Smith, based in the United Kingdom, is a manufacturer of recycled corrugated packaging materials. Otor is the second largest corrugated board producer in France. Otor operates six corrugated box plants, three specialty sheet plants, two paper mills and one packaging machine unit in France.

The Carlyle Group is an alternative investment company

The acquisition cost is expected to be around €247 million (about US$312 million) and the assumption of existing debt, equivalent to an all cash offer of €8.97 per Otor S.A. share.

In opting to pursue Otor, DS Smith’s board notes that combining the two companies would satisfy a number of objectives, including the development of a strong continental European corrugated packaging business focused on the moving consumer goods sector, and significantly strengthening DS Smith’s presence in France.

“The acquisition of Otor realizes a number of key strategic objectives for DS Smith. It makes us one of the leading players in corrugated packaging in France with 80 percent. of Otor’s sales derived from cyclically less sensitive FMCG customers,” says Miles Roberts, DS Smith’s group chief executive.