Mondi acquires certain of Smurfit Kappa's ops

At the same time, the group has disposed of its corrugated box plants in the UK.

The group confirmed on Monday, 19 April 2010, that it has signed an agreement with the Smurfit Kappa Group for the acquisition of its western European industrial and consumer bag operations, which consist of four plants in France, three in Spain, and one in Italy as well as certain sales offices.

"Mondi will have a net cash inflow of EUR 8m on acquisition of the business. The business had gross assets of €38m as of 31 December, 2009 and losses before tax of €12.6m in the year ended 31 December 2009.

"The acquired operations will benefit from integration into Mondi's industrial and consumer bags business," the group stated.

Mondi added that the acquisition was in line with its strategy to strengthen its leading market position in industrial and consumer bags in Europe and further increase the forward integration of kraft paper into bags.

"Mondi confirms further that it has also signed an agreement with the Smurfit Kappa Group for the sale of all three of Mondi's corrugated box plants in the UK. The shares in the business will be sold for a consideration of €3m on a cash and debt free basis.

"The consideration will be satisfied in cash at completion. Proceeds will be utilised to reduce Mondi's net debt. The business being disposed of had gross assets of €60m as of 31 December, 2009 and profits before tax of €2.0m in the year ended 31 December 2009.

"The divestiture concludes a programme of restructuring the Group's western European corrugated packaging and recycled containerboard portfolio and will enable Mondi to refine its geographical footprint around its core corrugated positions in central Europe and Turkey," Mondi said.

Both deals are conditional on customary completion conditions, it said.