DS Smith Buys Rival

In a move creating the United Kingdom's largest cardboard box maker, DS Smith PLC announced plans to acquire LINPAC Containers Group for GBP170 million (US$311 million).

DS Smith said it would fund the acquisition with a mixture of debt, a new loan from the Royal Bank of Scotland and a fully underwritten rights issue to raise GBP71 million.

LINPAC, a subsidiary of the privately owned LINPAC Holdings Group, supplies pallet boxes for beer bottles and fruit and vegetables, transport packaging, paper sacks and point-of-sale displays for retailers.

DS Smith Chief Executive Tony Thorne said the buy would make the company the U.K's largest corrugated packaging manufacturer with a 24 percent market share, and give it greater presence in the consumer goods section of the packaging market. He doesn't expect any regulatory objections.

Following the Acquisition, DS Smith will be the UK leader in corrugated packaging, in addition to its existing leading UK positions in corrugated case material paper and the collection of recovered paper.