South African tycoon Saki Macozoma-linked Mondi drops $6.2-billion bid for UK firm

Mfonobong Nsehe -

Mondi Plc, a multinational packaging and paper group based in the United Kingdom and linked to Saki Macozoma, a prominent South African businessman and current chair of Vodacom South Africa, has announced its withdrawal from the £5-billion ($6.2 billion) bid to acquire DS Smith, a UK-based paper, packaging, and recycling group.

Last month, Mondi, with Saki Macozoma serving on its audit and nominations committee, reached an agreement in principle on the financial terms of a potential all-share offer for DS Smith. However, following the successful bid by US company International Paper, Mondi has decided to abandon its pursuit.

Mondi ends pursuit of DS Smith after strategic review

In a press statement, Mondi stated that after a period of due diligence and careful consideration of the value the combination with DS Smith would bring to its shareholders, the board concluded that the transaction would not be in their best interests. Therefore, Mondi does not intend to make an offer for DS Smith.

Mondi’s board remains confident in the company’s portfolio of sustainable packaging and paper products, its scale, cost advantages, and quality asset base. It believes that along with its pipeline of organic investments, the company is well-positioned to achieve long-term structural growth in its markets, delivering strong cash generation, attractive returns, and sustainable value accretive growth for shareholders.

Focus shifts to core business after DS Smith bid withdrawal

Established in 1967, Mondi Plc operates across 30 countries with more than 21,000 employees. The company maintains around 100 production sites, primarily in Europe, Russia, North America, and South Africa. Its dual-listing on the London and Johannesburg Stock Exchanges reflects its global reach. Saki Macozoma holds a minority 0.00010-percent stake in Mondi.

Mondi’s recent announcement to abandon its pursuit of DS Smith triggered a surge in its share price. The stock price climbed over 6 percent this week, reaching £15.0257 ($18.6) at the time of writing. This translates to a market capitalization of £6.62 billion ($8.2 billion).

Mondi’s decision to withdraw its bid for DS Smith marks a pivotal development in the packaging and paper sector, potentially reshaping the landscape for mergers and acquisitions.  The company now appears to be strategically focusing on leveraging its existing strengths and exploring opportunities for sustainable growth within its core markets.