International Paper and DS Smith: A New Global Leader in Sustainable Packaging

International Paper (IP) and DS Smith (DS) have joined forces to create a global powerhouse in sustainable packaging solutions. The combined company, with a strong presence in Europe and North America, is poised to lead the industry in innovation, customer value, and environmental stewardship. This strategic merger is expected to generate significant synergies, enhance the companies' offerings, and drive long-term growth.

Strengthening Customer Value Proposition

The combination of IP and DS will create a truly global leader in sustainable packaging, with industry-leading positions in two of the most attractive geographies: Europe and North America. This expanded geographic footprint will enable the new entity to serve a broader set of customers across a wide range of attractive and growing end-markets (International Paper, Jan 31, 2025).

By combining the strengths of both companies, the new entity can offer customers an enhanced suite of sustainable packaging products and services, as well as improved innovation and geographic reach. This will result in an increased variety of choices and a superior portfolio of products across two continents (International Paper, Jan 31, 2025).



Optimizing Mill Network, Supply Chains, and Freight Costs

The integration of DS Smith's containerboard and pulp products into International Paper's mill system is expected to raise the combined integration rate to around 90%. This will allow the combined company to optimize its network of mills, box plants, and supply chains, leading to improved efficiency and reduced freight costs (International Paper, Jan 31, 2025).

This optimization will result in cost savings and improved profitability, as well as better resource allocation. The combined company can also boost its exposure to the e-commerce and fast-moving consumer goods (FMCG) segments, which are expected to continue growing (International Paper, Jan 31, 2025).

Innovative Sustainable Solutions and Products

The combined company can leverage the expertise of both management teams to accelerate innovative sustainable solutions and products for all customers. This will result in a competitive advantage, driving customer preference and market growth (International Paper, Jan 31, 2025).

The combined company's focus on sustainable packaging makes it well-placed to serve a broad set of customers across a wide range of attractive and growing end-markets. This focus on sustainability is a key differentiator and will attract environmentally conscious customers, further strengthening the company's market position.



Pre-tax Cash Synergies

International Paper expects to deliver at least $514 million (£413 million) of pre-tax cash synergies on an annual run-rate basis by the end of the fourth year following the effective date. This includes $474 million (€435,625,729.30) in yearly cost synergies and $241 million (€221,479,000) from operational synergies across the combined network of mills, box plants, and the global supply chain (International Paper, Jan 31, 2025).

These synergies, combined with the enhanced customer value proposition and optimized mill network, will contribute to the long-term financial performance and market position of the combined company, making it a global leader in sustainable packaging solutions.

In conclusion, the combination of International Paper and DS Smith is a strategic move that will create a new global leader in sustainable packaging solutions. The combined company's focus on innovation, customer value, and environmental stewardship, along with the expected synergies, positions it well for long-term growth and success in the attractive and growing North American and European regions.