FTSE 100 packaging giant Mondi PLC (LSE:MNDI) has snapped up the German, UK and Benelux business of cardboard box maker Schumacher for a value of €634 million (£531 million).
The South Africa-headquartered group said it will fund the deal from its existing bank facilities and expects it to boost earnings per share in the first full financial year following completion. The transaction is expected to close in the first half of 2025, subject to regulatory approval.
The Schumacher businesses specialise in e-commerce and fast-moving consumer goods (FMCG), which Mondi said would enhance its existing customer offering and expand its corrugated footprint in Western Europe.
An adjusted EBITDA of €66 million made by the businesses last year is expected to increase thanks to recent expansion of production and €22 million of 'cost synergies' over the coming three years.
Box-making capacity will be increased by over a billion square meters, with the addition of seven corrugated converting plants, two solid board mills and four solid board converting plants, including two state-of-the-art 'mega-box plants' in Germany that add significant capacity to meet the growing demand for sustainable packaging.
Germany is the largest packaging market in Europe, and adding capacity there presents "significant opportunities to introduce the group's unique range of products to a wider array of customers as they increasingly transition towards more sustainable packaging solutions", it said.