DS Smith and International Paper (IP) announced that their proposed merger plan has reached a significant milestone with the expiration of the waiting period under the US’ Hart-Scott-Rodino (HSR) Act.  

This development marks an ‘important step’ towards the completion of the proposed combination. 

The expiration of the HSR Act waiting period is a crucial regulatory step, removing a major barrier to the merger’s closure.  

However, the completion of the combination is still subject to other conditions, which include receiving regulatory clearance from the European Commission and the sanctioning of the scheme by the European Court. 

The two companies are now expecting this proposed combination to be finalised in the fourth quarter (Q4) of this year. 

In March this year, American paper and pulp company International Paper proposed an all-equity acquisition of the entire issued share capital of British packaging company DS Smith. 

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The transaction terms stipulate that DS Smith’s shareholders would receive 0.1285 shares in IP for each share they hold, resulting in them owning approximately 33.8% of the combined entity. 

The boards of both companies believe that the merger is strategically and financially beneficial, aiming to strengthen their global positions in the corrugated packaging solutions market.  

Legal advisers have been appointed by both parties, with Skadden, Arps, Slate, Meagher & Flom and Sidley Austin advising IP, and Slaughter and May, along with Sullivan & Cromwell, advising DS Smith. 

IP reportedly valued DS Smith at $7.22bn, which was higher than the purchase price offered by UK-based company Mondi for acquiring it.

Prior to IP’s merger proposal, Mondi made a £5.1bn ($6.4bn) all-share offer to acquire DS Smith in March 2024.