Clifford Chance

Clifford Chance advises Stockholm-listed Svenska Cellulosa Aktiebolaget on the proposed disposal of its packaging division for €1.7billion

Leading international law firm Clifford Chance announces that it has advised long-standing client, Svenska Cellulosa Aktiebolaget SCA (publ), on the proposed disposal of its packaging division, excluding the kraftliner assets, to DS Smith Plc for a gross price of €1.7 billion.

SCA Packaging is the second largest packaging business in Europe. Currently, SCA Packaging employs approximately 12,500 people and operates in 20 countries across Europe with 109 facilities.

DS Smith, which is a member of the FTSE 250 index, is a leading international supplier of recycled packaging and employs about 10,000 people at 94 manufacturing locations.

The transaction is divided into two parts with SCA and DS Smith having conditionally agreed the sale and purchase of the non-French packaging business and DS Smith having made an offer to acquire the French packaging business which SCA may accept following works council consultation.

Due to the size of the acquisition, it will constitute a reverse takeover by DS Smith under the UK Listing Rules. DS Smith propose to finance the acquisition with existing and additional debt and a fully underwritten rights issue to raise approximately £465 million.

The Clifford Chance team was led by London Corporate partners Jonathan Beastall and Steven Fox, and Corporate senior associate Nina Malan and involved many colleagues from across the firm's European offices.

Jonathan Beastall, who leads the firm's materials sector focus group, commented: "We are delighted to have worked alongside SCA on this transaction having also advised on the sale of SCA's Asian packaging operation in April 2010. SCA is a highly-valued and long-standing client of the Firm for whom we have acted on a number of strategic transactions over many years.  The materials sector is one in which we have considerable experience across a range of practices and our involvement in this highly significant transaction is something of which we are very proud."

The transaction is subject to a number of customary conditions and is expected to complete by no later than the end of July 2012.