Smurfit Kappa has bought two integrated paper-based packaging businesses in Brazil for €186 million (US$200.18 million).
Its newly bought Industria de Embalagens Santana (INPA) and Paema Embalagens have three recycled containerboard mills with a total capacity of 210,000 tons and four corrugated facilities servicing the Northeast of Brazil.
The net assets of INPA and Paema at 30 September 2015 were €30 million and €6 million respectively.
The size and location of the combined operations will build on the Group’s leadership position as the largest pan-regional corrugated packaging supplier in Latin America.
Smurfit Kappa Group will also enhance the two businesses through the application of the group’s operating systems and design and innovation capability.
Furthermore, the group’s enlarged global footprint will improve its packaging offering to multinationals operating throughout The Americas region.
The combined business employs over 1,700 people and the Group currently expects to generate synergies of approximately €6 million to be delivered by the end of 2017, primarily through operational improvements and supply chain optimization as the businesses are integrated.
The transaction was completed at the end of December 2015 and will be immediately earnings accretive.
