Linklaters, Slaughters lead on Mondi’s £5bn DS Smith bid

Linklaters acts for Mondi in deal to create £10bn packaging giant as global M&A surges after 2023’s slump

Linklaters and Slaughter and May are advising on Mondi’s proposed £5.14bn all-share offer to buy smaller FTSE 100 rival DS Smith, in a deal that will create a packaging giant worth more than £10bn in market value.  

Linklaters is acting for Mondi on the matter, while Slaughters is repping DS Smith.  

The terms of the deal represent an implied value of 373 pence per DS Smith share – a 33% premium to DS Smith’s closing share price on 7 February, the day before Mondi announced the preliminary bid.

The companies said in a joint statement that the deal would be “an exciting opportunity to create a pan-European industry leader in paper-based sustainable packaging solutions”.

Mondi’s offer comes amid a surge in global M&A after dealmaking slumped to a 10-year low in 2023, as an improved interest rate outlook, slowing inflation and strong corporate earnings see confidence return to boardrooms.  

Global M&A volumes through to the first week of March jumped 55% compared to the same period in 2023 to just over $600bn, according to Reuters, though deals are taking longer to complete amid increased regulatory scrutiny.

The Linklaters team acting for Mondi is led by corporate partners Aisling Zarraga and Matthew Hearn, corporate managing associate Thomas Bishop and US corporate associate Igor Rogovoy, alongside partners Bradley Richardson and Cara Hegarty (both employment and incentives); Ben Dulieu (capital markets); Benedict James (finance); and Rhian Parker and Sam Lintonbon (both tax).

Zarraga was part of a Linklaters team that advised Mondi on its original dual listing structure and later simplification to a premium listing on the LSE with a secondary listing on the JSE. In 2022 a cross-border team led by Munich-based partner Timo Engelhardt also advised the business on the sale of its personal care components business to Japan-based Nitto Denko Corporation.  

Meantime Slaughters’ team is headed by corporate partner duo David Watkins and Paul Dickson, alongside partners Anna Lyle-Smythe (competition); Phil Linnard (employment and incentives); Azadeh Nassiri (financing); Daniel Schaffer (pensions); and Mike Lane (tax). 

Back in 2018 Lyle-Smythe and Lane also helped lead a Slaughters team that repped DS Smith when it bought Western European packaging business Europac in a £1.45bn deal.  

Having seen a sales boom during the Covid-19 pandemic, Reuters reported paper packaging firms have been hit by low volumes and prices in the past 12 months as customers de-stocked amid tough market conditions.  

Mondi’s offer is the second multi-billion dollar bid for consolidation in the packaging industry in recent months, following rival Smurfit Kappa’s announcement last September that it was buying WestRock in an $11bn deal that is expected to close later this year. Matheson, Wachtell Lipton Rosen & Katz and Freshfields Bruckhaus Deringer have been called in to advise Smurfit on the deal, while Westrock is being guided by Paul Weiss and Cravath Swaine & Moore.

Mondi and DS Smith said they were currently evaluating the quantity of synergies arising from the proposed deal, which they claimed would benefit both sets of shareholders with increased exposure to structural growth trends in sustainable packaging, as well as a complementary geographic footprint that would create a leading player in corrugated packaging across Europe.

Under the terms of the deal Mondi shareholders would own 54% of the enlarged Mondi group and DS Smith shareholders the rest.  

Leadership of the enlarged Mondi group would remain the same, with Andrew King acting as chief executive officer and Mike Powell as chief financial officer. Current DS Smith chair Philip Yea would continue in that role, with three non-executive directors of DS Smith also expected to join the enlarged group’s board.

Rothschild & Co is acting as lead financial adviser to Mondi on the deal, with UBS acting as financial adviser and corporate broker. Goldman Sachs is financial adviser to DS Smith, with Citi and JP Morgan Cazenove acting as financial advisers and corporate brokers.

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