Packaging giant Smurfit Kappa has announced that it has reached an agreement to acquire Serbia’s Fabrika Hartije d.o.o. Beograd (FHB) paper mill and corrugated packaging plant Avala Ada for €133 million.
Smurfit Kappa Group CEO, Tony Smurfit, called the acquisition “a cornerstone” for expanding the packaging company’s business in Southeast Europe.
“We look forward to welcoming their experienced teams into the Smurfit Kappa Group, and we are confident their expertise and the high quality of the companies' asset bases will provide us with an excellent platform to grow in the region and further strengthen our European offering for our new and existing customers,” he added.
Both businesses are well invested, and are market leaders in the Serbian packaging industry.
Strong Platform For Organic Growth
With a customer base predominantly comprising local and national customers, the acquisition provides a strong platform for organic growth with Smurfit Kappa’s pan European and multi-national customers in the region.
The containerboard mill recently upgraded its recycled containerboard machine, and has a current production capacity of 120,000 tonnes.
The mill has significant potential to drive synergies, and further increase capacity with a limited investment of capital.
Presently, the corrugated plant has a production capacity of around 110 million square metres, and produces both corrugated and laminated packaging.
The transaction reflects a pre-synergy multiple of 7.6 times the expected full year 2018 EBITDA, and the consideration will be funded from the group's existing resources.
The transaction is expected to be complete by the end of this year, subject to customary completion conditions.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: The European Supermarket Magazine.
