Paper and packaging giant DS Smith is set to return to the London market just a year after being bought by a US rival in a deal worth £5.8 billion.
Memphis-based International Paper plans to de-merge its European, Middle East and Africa division – largely made up of the DS Smith business – through a listing on both the London and New York stock exchanges.
International Paper is expecting to complete the spin-off in a year to 15 months, subject to shareholder approval, and said it aims to keep a “meaningful ownership stake” in the new company.
It comes a year after DS Smith disappeared from the London market when it was snapped up by International Paper in a deal which created one of the world’s largest packaging manufacturers.
International Paper has since been streamlining its European operations, last May announcing plans to close five sites in the UK, putting about 300 jobs at risk, to cut costs after the deal.
The EMEA business – which is expected to be called DS Smith – currently operates across 30 countries and will include the regional operations of DS Smith and International Paper.
International Paper said it plans to keep investing in the EMEA division ahead of the split, with 400 million US dollars (£289 million) earmarked for the unit this year.
International Paper chairman and chief executive Andy Silvernail said: “During the past year, we have created two regional powerhouses with scale, strong customer relationships, leading brands and talented teams.
“The two businesses operate in distinct market environments and are at different stages of their transformation.
“We have learned a lot about how to create value in each region.
“The next right step in our transformation journey to achieve full value creation potential is to create two independent, regionally-focused companies.
“Taking this swift, decisive action now will enable both businesses to reach best-in-class performance and maximise long-term value creation through enhanced focus on their unique opportunities and targeted investment approaches.”
Tim Nicholls, executive vice-president of DS Smith EMEA, said: “The past 18 months have brought significant change across our industry and our markets.
“In that time, we have acted decisively to reshape our EMEA business – integrating our operations, simplifying our structure and ensuring our sites are aligned to the needs of our customers.”
