US-based International Paper (IP) has dropped from the proposed €9.5bn acquisition of Irish packaging firm Smurfit Kappa.
International Paper said that it will not make an offer for Smurfit Kappa due to lack of engagement by its board of directors and management.
In February this year, IP offered €8.6bn ($10.6bn) to acquire Smurfit Kappa, which was rejected by the company.
Smurfit Kappa noted that the unsolicited proposal from International Paper failed to reflect the company’s strong growth prospects and attractive industry outlook.
In March, Smurfit Kappa again rejected an increased takeover offer of €9.5bn, saying that the revised proposal represents an increase in value of only €1.08 per share, equivalent to less than 3%.
International Paper chairman and CEO Mark Sutton said: “While we continue to believe in the strategic and financial potential of this combination, our commitment was to proceed in a disciplined manner that would create value for both sets of shareholders.
“Moving forward, we remain focused on executing our strategy and are excited about our outlook. We have many levers to create shareholder value and will be responsible stewards of our shareholders’ capital.”
Smurfit Kappa said the group is implementing its medium term plan that will enhance its operating platform for sustained growth and deliver better performance against all operating and financial measures.
Smurfit Kappa Group CEO Tony Smurfit said: “We continue to see the benefits from our investments in recent years and we are now executing a central element of our Medium Term Plan with the acquisition of Reparenco.”
Smurfit Kappa provides packaging solutions for the food and drink, consumer good and industrial sectors.
The firm’s product portfolio includes container board, paper and board solutions, as well as packaging machinery solutions.
International Paper produces renewable fiber-based packaging, pulp and paper products, and has manufacturing operations in North America, Latin America, Europe, North Africa, India and Russia.