DS Smith, the leading UK packaging giant, has agreed the €1.9bn acquisition of Spanish competitor Europac.
Announced in a statement on Monday, the merger will strengthen DS Smith's position in the key market of Western Europe, creating significant value for customers and attractive returns for shareholders.
It predicts that the acquisition will lead to substantial annual run-rate pre-tax cost synergies of €50mn plus further integration benefits, while also strengthening its global supply chain.
"The acquisition of Europac is a very exciting development for DS Smith, strengthening our position as a leading global supplier of sustainable packaging solutions," said its Chief Executive Miles Roberts. "We have a long-standing relationship with Europac, which is a company we have long admired, given the quality of their assets, employees and customers.
"We look forward to working with the Europac team and further capitalising on increasing global customer demand for high quality, sustainable and engaging packaging."
Europac, which delivered €868mn of revenue in 2017 and is 42% family-owned, has welcomed the offer and will see its packaging assets developed significantly under DS Smith's guidance. The acquisition is set to complete in the final quarter of 2018, subject to regulatory approval.