UK-based DS Smith has received approval from the European Commission (EC) under the EU Merger Regulation for the proposed acquisition of Spanish firm Europac for an implied enterprise value of €1.904bn ($2.2bn).
The company has agreed with the EC for the disposal of two packaging businesses in Western France and Portugal as part of the transaction clearance and expects to close the deal by the end of this year.
DS Smith signed the deal in June in a bid to strengthen its footprint in Western Europe.
The commission started an investigation into the transaction with a focus on the markets for corrugated case materials, sheets and cases.
According to the EC, the deal would reduce the level of competition in corrugated sheets and corrugated cases market in Portugal as well as the market for corrugated cases in Western France because the merged entity would face limited constraints from competitors.
In a move to address this concern, the commission has asked DS Smith to close Europac’s box plant in Ovar, Portugal, along with two DS Smith plants in France.
The Europac’s box plant manufactures corrugated sheets and cases in Portugal while the two DS Smith plants, DSS Normandie, and DSS Normandie (Cabourg) manufacture corrugated sheets and cases for supply in Western France.
DS Smith CEO Miles Roberts said: “I am delighted that we have received competition clearance from the European Commission. This is an important milestone in our acquisition of Europac.
“We look forward to completing the formal takeover process and integrating Europac into DS Smith to the benefit of all our stakeholders. This acquisition is a fantastic opportunity to enhance our customer coverage and offering in this important region.”