Irish packaging firm Smurfit Kappa has rejected €8.6bn ($10.6bn) takeover offer from the US-based International Paper.

Smurfit Kappa said the unsolicited proposal from International Paper failed to reflect the company's strong growth prospects and attractive industry outlook.  

International Paper has submitted a proposal to purchase the entire issued and to be issued share capital of Smurfit Kappa.

As per terms of the proposal, International Paper agreed to pay €22.00 in cash and 0.3028 shares of its common stock for each Smurfit Kappa ordinary share held by them.

Smurfit Kappa chairman Liam O’Mahony said: “The Board of Smurfit Kappa has unanimously rejected this unsolicited and highly opportunistic Proposal. It does not reflect the Group’s true intrinsic business worth or its prospects.

“We delivered a record performance in 2017 and underlying trading momentum has continued into 2018. The Group has a proven management team which we believe will deliver significantly greater value for shareholders on a stand-alone basis.”

Smurfit Kappa provides packaging solutions for the food and drink, consumer good and industrial sectors.

The company’s product portfolio includes container board, paper and board solutions, as well as packaging machinery solutions.

With around 46,000 employees across 35 countries, Smurfit Kappa reported sales of around €8.6bn in 2017.

In January this year, International Paper completed the transfer of its North America Consumer Packaging business to Graphic Packaging.

In September 2017, Huhtamaki acquired International Paper's foodservice packaging operations in China. The divested business has two facilities in Shanghai and Tianjin and a workforce of about 200 employees.

Graphic Packaging holds 79.5% stake in the combined company, while IP owns the remaining 20.5% interest.

With manufacturing operations in North America, Latin America, Europe, North Africa, India and Russia, International Paper produces renewable fiber-based packaging, pulp and paper products.

The company, which produces corrugated packaging products, has reported sales of around $22bn for the year 2017.

Image: International Paper's global headquarters. Photo: courtesy of International Paper Company.