Smurfit completes €51m asset swap agreement

Smurfit Kappa Group has signed an asset swap agreement with Mondi Group which means Smurfit will acquire Mondi’s corrugated operations in the UK, while Mondi will acquire SKG’s Western European sack converting operations.

The total cash cost of the asset swap for SKG is €51m.

Smurfit, one of the world’s largest integrated manufacturers of paper-based packaging products, with operations in Europe and Latin America, is acquiring Mondi’s UK corrugated operations, comprising three corrugated box plants, for €43m on a cash and debt-free basis.

The three facilities reported a combined 2009 full year EBITDA of €8m and a profit before tax of €2m.

Smurfit is disposing of its Western European sack converting operations, comprising four plants in France, three in Spain, and one in Italy, as well as a number of sales offices.

In 2009, these operations reported an EBITDA loss of €4.4m and a loss before tax of €12.6m.

On disposal, SKG will incur exceptional write-offs of approximately €30m, including a net cash cost of €8m.

Gary McGann, Smurfit Kappa Group CEO, said: "We are pleased to announce this asset swap agreement, which further strengthens the group’s leadership in its core corrugated packaging grade, and enhances the efficiency of its integrated system in the increasingly attractive UK market."