Business

International Paper says it has options of Smurfit deal doesn’t work out

Company reports earnings of $729 million

International Paper is trying to go to the “next level” by acquiring Smurfit .

Thu Apr 26 2018 - 20:56

If International Paper’s bid for Smurfit Kappa doesn’t work out, the world’s largest paper maker says it will find other ways to take advantage of surging cardboard box demand.

There is “tremendous opportunity” for the Memphis, Tennessee-based company to grow organically and lower costs via increased automation, chief executive officer Mark Sutton said on Thursday .

International Paper is trying to go to the “next level” by acquiring Smurfit Kappa. However, the box maker last month rejected a sweetened €8.9 billion ($10.8 billion) takeover proposal as inadequate.

“This is a great option, Smurfit Kappa is a big one, but it’s by no means the only option we have,” Mr Sutton said . “This is not a must-do deal.”

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The takeover bid comes amid a wave of industry consolidation, increasing packaging prices amid a global economic growth, and a rise in e-commerce, which is boosting demand for cardboard packaging. Earlier this year, WestRock agreed to buy KapStone Paper & Packaging for about $3.4 billion.

International Paper on Thursday reported first quarter net earning of $729 million. Quarterly net sales were $5.6 billion in the first quarter of 2018 compared with $5.7 billion in the fourth quarter of 2017 and $5.1 billion in the first quarter of 2017.

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