DS Smith has spent €1.6bn (£1.3bn) buying the packaging division of a Swedish tissue-maker in a deal which it claimed made it Europe's biggest recycling company.
The acquisition from SCA – whose packaging operations have about 12,000 employees and brought in sales of €2.5bn in 2010 – will be paid for by a combination of debt and £466m from a nine-for-eight rights issue priced at 95p per share.
DS Smith's chief executive, Miles Roberts, said yesterday he wanted to spread into northern Europe. His company collects old cardboard boxes from retailers and manufacturers, recycles them, and has them back in use with customers such as Mars, Kraft, Procter & Gamble and Reckitt Benckiser as little as a week later.
"We're big in the UK and France, but SCA is focused in countries such as Germany, Switzerland, the Netherlands and Nordics – where we have a very limited presence," Mr Roberts said. "Our customers want us to expand and grow our model. That's what this deal does."
SCA's customers include Mars, Danone, Unilever, Mercedes, BMW and swaths of Germany's car and aeronautics industry.
The acquisition must be agreed at a shareholder meeting on 3 February.Reuse content