International Paper Announces Filing of Definitive Proxy Statement in Connection with its Pending Acquisition of DS Smith

Rhea-AI Summary

International Paper (NYSE: IP) has filed a definitive proxy statement with the SEC for its pending acquisition of DS Smith Plc (LSE: DSS). The company's board recommends shareholders vote 'FOR' the proposal to issue new IP common stock for the combination. The special meeting is scheduled for October 11, 2024, with shareholders of record as of September 12, 2024, eligible to vote. DS Smith has set October 7, 2024, for its shareholder meeting to approve the deal.

The acquisition aims to create a global leader in sustainable packaging solutions, focusing on North American and European markets. It's expected to increase vertical integration, improve profitability, enhance customer offerings, and accelerate sustainability initiatives. The transaction will be structured as an acquisition of DS Smith by IP, following U.K. Takeover Code and English law.

Positive

• Creation of a global leader in sustainable packaging solutions
• Increased vertical integration expected to improve profitability
• Enhanced customer value proposition through expanded offerings and geographic reach
• Acceleration of sustainability initiatives and innovation

Negative

• None.

Insights

Legal Expert

The filing of the definitive proxy statement marks a crucial step in International Paper's acquisition of DS Smith. This document, submitted to the SEC, outlines the terms of the merger and solicits shareholder votes. It's a legally required disclosure that provides transparency to investors.

The scheduled special meeting on October 11, 2024, is pivotal. Shareholders of record as of September 12, 2024, will vote on issuing new IP shares for the acquisition. This vote is critical as it determines whether the deal proceeds.

Notably, DS Smith has also published its scheme document in the UK, setting October 7, 2024, for their shareholder meeting. This dual-pronged approach, complying with both US and UK regulations, underscores the complexity of cross-border mergers. The unanimous board recommendation to vote 'FOR' the proposals suggests strong internal confidence in the deal's benefits.

Financial Analyst

This acquisition positions International Paper for significant market expansion. By combining with DS Smith, IP aims to create a global leader in sustainable packaging, focusing on the lucrative North American and European markets. This strategic move could potentially boost IP's competitive edge and market share.

The merger promises increased vertical integration, which typically leads to improved profitability through cost synergies and operational efficiencies. For investors, this could translate to enhanced long-term value. However, it's important to consider the short-term costs associated with mergers, including potential integration challenges and debt implications.

The emphasis on sustainability aligns with growing market trends and could attract environmentally conscious investors and customers. This focus may lead to innovation-driven growth and potentially higher valuations in the long run. Investors should closely monitor post-merger integration and realization of synergies to gauge the deal's success.

Market Research Analyst

The merger between International Paper and DS Smith is set to reshape the packaging industry landscape. By combining their strengths, the new entity aims to enhance its customer value proposition through expanded offerings, innovation and broader geographic reach. This could lead to increased market share and potentially higher revenues.

The focus on the North American and European regions is strategic, as these markets show promising growth in sustainable packaging demand. This aligns well with increasing consumer and regulatory pressure for eco-friendly solutions. The combined company's enhanced capacity for innovation in sustainability could be a significant differentiator in a competitive market.

Investors should watch for post-merger market reactions, potential shifts in customer preferences and any regulatory challenges that may arise. The success of this merger could trigger further consolidation in the industry, potentially affecting smaller players and altering competitive dynamics.

IP's Board of Directors Recommends IP Shareholders Vote "FOR" the Proposal

MEMPHIS, Tenn., Sept. 12, 2024 /PRNewswire/ -- International Paper (NYSE: IP, "IP") today announced that it has filed with the U.S. Securities and Exchange Commission (the "SEC") a definitive proxy statement on Schedule 14A (including any amendments and supplements thereto, the "Definitive Proxy Statement") in connection with its pending acquisition of DS Smith Plc (LSE: DSS, "DS Smith") (the "Combination").

All shareholders of record of IP common stock as of the close of business on Thursday, September 12, 2024, will be entitled to vote their shares by proxy at the special meeting of the IP shareholders (the "Special Meeting") to approve the issuance (the "Share Issuance") of new shares of common stock of IP, par value $1.00 per share, in connection with the Combination. In addition, on September 11, 2024, DS Smith published and sent to DS Smith shareholders its scheme document in the United Kingdom prepared in accordance with Part 26 of the U.K. Companies Act 2006, containing the full terms and conditions of the Combination, and setting October 7, 2024 as the date of DS Smith's shareholder meeting to approve the Combination. On September 11, 2024, IP also published a Prospectus with the U.K. Financial Conduct Authority, in connection with the admission to trading of IP's shares of common stock, par value $1.00 per share, on the London Stock Exchange upon completion of the Combination.

The Special Meeting is scheduled to take place on Friday, October 11, 2024. All eligible IP shareholders will receive a copy of the Definitive Proxy Statement and instructions on how to vote. The IP board of directors unanimously recommends that IP shareholders vote "FOR" the proposals as described in detail in the Definitive Proxy Statement.

The Combination will be structured as an acquisition of DS Smith by IP and implemented in accordance with the rules of the U.K. Takeover Code and English law.

The Combination is expected to create a global leader in sustainable packaging solutions focused on the attractive and growing North American and European regions; leverage the companies' complementary business models to increase vertical integration to improve profitability; strengthen customer value proposition through enhanced offerings, innovation, and geographic reach; and accelerate sustainability, including through innovation, for the benefit of all stakeholders.

About International Paper
International Paper (NYSE: IP) is a global provider of renewable fiber-based packaging and pulp products, and one of the world's largest recyclers. Headquartered in Memphis, Tenn., we employ approximately 39,000 colleagues globally who are committed to creating what's next. We serve customers worldwide, with manufacturing operations in North America, Europe, Latin America and North Africa. Net sales for 2023 were $18.9 billion. Additional information can be found by visiting internationalpaper.com.

Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this press release that are not historical in nature may be considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements can be identified by the use of forward-looking or conditional words such as "expects," "anticipates," "believes," "estimates," "could," "should," "can," "forecast," "intend," "look," "may," "will," "remain," "confident," "commit" and "plan" or similar expressions. These statements are not guarantees of future performance and reflect management's current views and speak only as to the dates the statements are made and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these statements. All statements, other than statements of historical fact, are forward-looking statements, including, but not limited to, statements regarding the anticipated financial results, economic conditions, industry trends, future prospects and the execution and consummation of corporate transactions or contemplated acquisitions including the Combination. Factors which could cause actual results to differ include but are not limited to: (i) our ability to consummate and achieve the benefits expected from, and other risks associated with, acquisitions, joint ventures, divestitures, spinoffs, capital investments and other corporate transactions, including, but not limited to, the Combination and our ability to integrate and implement our plans, forecasts, and other expectations with respect to the combined company; (ii) uncertainty as to whether or when the Combination may be completed, if at all; (iii) risks with respect to climate change and global, regional, and local weather conditions, as well as risks related to our targets and goals with respect to climate change and the emission of greenhouse gases ("GHG") and other environmental, social and governance matters, including our ability to meet such targets and goals; (iv) loss contingencies and pending, threatened or future litigation, including with respect to environmental related matters; (v) the level of our indebtedness, risks associated with our variable rate debt, and changes in interest rates (including the impact of current elevated interest rate levels); (vi) the impact of global and domestic economic conditions and industry conditions, including with respect to current negative macroeconomic conditions, inflationary pressures and changes in the cost or availability of raw materials, energy sources and transportation sources, supply chain shortages and disruptions, competition we face, cyclicality and changes in consumer preferences, demand and pricing for our products, and conditions impacting the credit, capital and financial markets; (vii) risks arising from conducting business internationally, domestic and global geopolitical conditions, military conflict (including the Russia/Ukraine conflict, the conflict in the Middle East, the possible expansion of such conflicts, and the potential geopolitical and economic consequences associated therewith), changes in currency exchange rates, trade protectionist policies, downgrades in our credit ratings, and/or the credit ratings of banks issuing certain letters of credit, issued by recognized credit rating organizations; (viii) the amount of our future pension funding obligations, and pension and healthcare costs; (ix) the costs of compliance, or the failure to comply with, existing and new environmental (including with respect to climate change and GHG emissions), tax, labor and employment, privacy, anti-bribery and anti-corruption, and other U.S. and non-U.S. governmental laws and regulations; (x) any material disruption at any of our manufacturing facilities or other adverse impact on our operations due to severe weather, natural disasters, climate change or other causes; (xi) our ability to realize expected benefits and cost savings associated with restructuring initiatives; (xii) cybersecurity and information technology risks, including as a result of security breaches and cybersecurity incidents; (xiii) our exposure to claims under our agreements with Sylvamo Corporation; (xiv) our failure to realize the anticipated benefits of the spin-off of Sylvamo Corporation and the qualification of such spin-off as a tax-free transaction for U.S. federal income tax purposes; and (xv) our ability to attract and retain qualified personnel. These and other factors that could cause or contribute to actual results differing materially from such forward-looking statements can be found in our press releases and other reports filed with the SEC. In addition, other risks and uncertainties not presently known to IP or that we currently believe to be immaterial could affect the accuracy of any forward-looking statements. IP undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

IP's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and its Quarterly Reports on Form 10-Q for the periods ended March 31, 2024, and June 30, 2024 contain additional information regarding forward-looking statements and other risk factors with respect to IP.

Additional Information
This press release may be deemed to be solicitation material in respect of the Combination, including the Share Issuance. In connection with the Share Issuance, IP filed the Definitive Proxy Statement with the SEC on September 12, 2024. To the extent IP effects the Combination as a scheme of arrangement under the laws of the United Kingdom, the Share Issuance does not require registration under the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the "Securities Act"), pursuant to an exemption provided by Section 3(a)(10) under the Securities Act. In the event that IP determines to conduct the Combination pursuant to an offer or otherwise in a manner that is not exempt from the registration requirements of the Securities Act, it will file a registration statement with the SEC containing a prospectus with respect to the Share Issuance. INVESTORS AND STOCKHOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT, THE SCHEME DOCUMENT, AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC CAREFULLY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT IP, THE COMBINATION, THE SHARE ISSUANCE, AND RELATED MATTERS. Investors and stockholders will be able to obtain free copies of the Definitive Proxy Statement and other documents filed by IP with the SEC at the SEC's website at http://www.sec.gov. In addition, investors and stockholders will be able to obtain free copies of the Definitive Proxy Statement, the scheme document, and other documents filed by IP with the SEC at https://www.internationalpaper.com/investors.

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SOURCE International Paper

FAQ

When is International Paper's special shareholder meeting for the DS Smith acquisition?

International Paper's special shareholder meeting for the DS Smith acquisition is scheduled for Friday, October 11, 2024.

What is the record date for International Paper shareholders to vote on the DS Smith acquisition?

The record date for International Paper shareholders to vote on the DS Smith acquisition is the close of business on Thursday, September 12, 2024.

What are the expected benefits of International Paper's acquisition of DS Smith?

The expected benefits include creating a global leader in sustainable packaging, improving profitability through vertical integration, enhancing customer offerings and geographic reach, and accelerating sustainability initiatives.

How does the International Paper board recommend shareholders vote on the DS Smith acquisition?

The International Paper board of directors unanimously recommends that shareholders vote 'FOR' the proposals related to the DS Smith acquisition.