Shares of JSE-listed packaging and paper producer Mondi jumped more than 10% on Friday when it announced it has decided not to go to battle to acquire industry peer DS Smith, which has another hefty offer.
“Following a period of due diligence, and after carefully considering the value the combination with DS Smith would deliver to Mondi’s shareholders, the Mondi Board has decided that the transaction would not be in the best interests of its shareholders,” it said in a statement.
Mondi, now valued at £6.69 billion (R160 billion) in London, its primary listing, had confirmed reports it was considering an acquisition in February, citing the potential benefits of the creation of an industry leader in European paper-based sustainable packaging. Along with the benefits on offer from scale, the combined group could benefit from a trend of structural growth in sustainable packaging, as well as from enhanced vertical integration and paper supply.
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