Smurfit Kappa makes two acquisitions in Brazil

Both INPA and Paema are privately owned integrated packaging businesses and their combined operations have three recycled containerboard mills with a total capacity of 210,000 tonnes and four corrugated facilities servicing the Northeast of Brazil, through the Rio and Sao Paulo regions and the South of the country.

The net assets of INPA and Paema at 30 September 2015 were €30m and €6m, respectively.

Smurfit said the size and location of the combined operations will build on the group’s leadership position as the largest pan-regional corrugated packaging supplier in Latin America.

It expects to generate synergies of approximately €6m by the end of 2017, primarily through operational improvements and supply chain optimisation as the businesses are integrated.

The transaction, which was completed at the end of last year and funded from the group's existing liquidity, is expected to be immediately earnings accretive.

Chief executive officer Tony Smurfit said: “We are pleased to announce the acquisition of INPA and Paema, which will extend our reach into a strategically important market and build on our geographic diversity and strength.

“We look forward to welcoming the experienced teams into the Smurfit Kappa Group. We are confident that their expertise and the high quality of their asset base will provide us with a strong entry point into the Brazilian market and, as the leading pan-regional operator in Latin America, further strengthen our service offering to our existing international customers.”

At 0935 GMT, Smurfit shares were down 1.9% to 23.14p.