UK-based DS Smith has agreed to sell two of its packaging businesses to US-based pulp and paper company International Paper for €63m ($71.16m).
The two business sales, which are located in North Western France and Portugal, will fulfil the commitment made to the European Commission in relation to the clearance of Papeles y Cartones de Europa (Europac) acquisition by DS Smith.
The €1.904bn ($2.2bn) acquisition concluded in January.
The latest transaction is subject to customary closing conditions, including works council consultation and regulatory approvals. The company expects to close the sales in the first half of the current 2019-2020 financial year.
DS Smith group CEO Miles Roberts said: “I am delighted that we are on track to meet our commitment to the European Commission with both an attractive price and a good home for the businesses in International Paper.”
In November, DS Smith received approval from the European Commission (EC) under the EU Merger Regulation for the Europac deal after it agreed to sell the two packaging businesses.
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 as 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 of its plants in France.
In June, DS Smith announced the deal, which will help to strengthen its footprint in Western Europe.