Smurfit-Stone Container Corp. announced that the company has signed a letter of intent with Jefferson Smurfit Group, formerly Smurfit-Stone’s largest shareholder, under which Smurfit-Stone will exchange its European packaging operations and receive JS Group’s 50 percent ownership in Smurfit-MBI, a Canadian packaging business, and a payment from JS Group of approximately $190 million.
Smurfit-Stone currently owns the other 50 percent of Smurfit-MBI. When the transactions are completed, Smurfit-Stone will own 100 percent of Smurfit-MBI and will end its manufacturing presence in Europe.
The transactions are expected to close in the first quarter of 2003.
Commenting on this announcement, Patrick J. Moore, Smurfit-Stone president and CEO, said the exchange is a natural step for both Smurfit-Stone and Jefferson Smurfit Group following the September 2002 privatization of JS Group. “For Smurfit-Stone, these transactions further our stated strategy of focusing on North America. They will concentrate our primary asset base in the U.S. and Canada and enable us to continue to broaden our capability to serve our customers," Moore said.
Based in Mississauga, Ontario, Smurfit-MBI is Canada’s second largest manufacturer of corrugated containers, and a leading producer of specialty retail packaging and point-of-purchase displays. The company operates 15 converting facilities in Canada.
Smurfit-Stone’s largest European operation is Europa Carton, based in Hamburg, Germany. Europa Carton is one of the leading corrugated container manufacturers in Europe with two paperboard mills, 11 packaging plants and five recycling facilities.
Smurfit-Stone’s European operations also include one containerboard mill and three packaging plants in Spain, four in Belgium, and one each in France and the Netherlands. In 2002, the European operations produced about 500,000 short tons of containerboard and boxboard.