Mondi’s footprint in Europe will almost double with the announcement yesterday of the acquisition of packaging assets of Schumacher Packaging in the region, for €634 million (R12.3 billion), to be financed from Mondi's existing facilities.
Mondi said in a statement yesterday the deal with the family-owned Schumacher would strengthen its corrugated converting footprint in Europe with “highly complementary assets”, increasing capacity by over 1 billion square metres.
“This acquisition significantly increases our corrugated converting capacity, extends our reach across Western Europe, and offers strong downstream integration opportunities, while broadening our customer offering with a complementary fibre-based product range,” Mondi's CEO Andrew King said in a statement.
Schumacher’s directors said on the company website that the deal with Mondi was part of Schumacher's strategy presented in July this year, which focused on integrating their healthy company built up over three generations, into larger more international companies.
“As part of Mondi we will be stronger, more innovative, creating even greater customer proximity than Schumacher Packaging could achieve alone,” the company said. In July, it had entered into a similar deal with Spanish Saica Group for Schumacher's subsidiary in Poland.
Bjoern Schumacher and Hendrik Schumacher, co-CEOs of Schumacher, would be retained, by Mondi respectively, as a strategic adviser and as chief operating officer Solid Board.
The acquisition comprises seven corrugated converting plants, two solid board mills and four solid board converting plants. These complement Mondi's network of corrugated plants across Central and Eastern Europe, adding over 1bn square metres of capacity when fully operational.
Mondi already operates 4 containerboard mills and 11 corrugated converting plants in Europe.
Among the acquired sites are two mega-box plants in Germany, at Ebersdorf and Greven, which have “best-in-class production speed and operational efficiency as well as a highly skilled workforce with a culture aligned with Mondi’s,” the group said.
Mondi said the transaction was expected to be earnings per share accretive in the first full financial year.
Mondi, a global producer of sustainable packaging and paper, said the acquisition would expand its corrugated footprint in Western Europe and add complementary fibre-based products, focused on eCommerce and Fast-Moving Consumer Goods (FMCG), to enhance its existing customer offering.
The acquisition was in line with its strategy to expand its Corrugated Packaging business in Europe and adjacent markets; to invest in cost advantaged assets; to further integrate upstream and downstream operations to ensure security of supply for customers and optimised operations, and to continue to partner with customers to deliver innovative solutions.
Expanding Mondi’s eCommerce offering particularly in Germany, the largest packaging market in Europe, also presented opportunities to introduce the group's products to a wider array of customers as they transition towards sustainable packaging solutions.
In 2023, Schumacher Packaging's Western European Packaging Assets delivered adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) of €66m.
This was expected to increase as recently added capacity at Greven ramped up, and the identified €22m of cost synergies were realised over the three years following completion.
BUSINESS REPORT