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Summary
- Mondi Plc will be acquiring 90.38 per cent of the outstanding shares in Olmuksan International Paper, a leading Turkish corrugated packaging player.
- The company will launch an obligatory tender offer after the completion of the transaction to acquire the remaining 9.62 per cent of outstanding shares
- Olmuksan, for the year ended 30 September 2020, has produced 256,000 tonnes of corrugated packaging
British multinational packaging and paper group Mondi Plc (LON: MNDI) has decided to acquire a majority stake in Turkish corrugated packaging company Olmuksan International Paper Ambalaj Sanayi ve Ticaret A.S from International Paper. The acquisition cost of 90.38 per cent of the outstanding shares of the Istanbul-based company would be around €66 million.
The acquisition cost of the company implies an enterprise value on a 100 per cent basis, which would amount to around €88 million for the total shareholding. The transaction is expected to complete in the first half of 2021 but is subject to competition approval and other closing requirements.
After the completion of the transaction, Mondi will launch an obligatory tender offer to acquire the remaining 9.62 per cent of outstanding shares in the Olmuksan International Paper, which are in possession of smaller shareholders.
Olmuksan, which is listed on the Istanbul Stock Exchange, is a prominent player in the corrugated packaging market in Turkey. Mondi has operated successfully in country for many years and has grasped strong knowhow of the market there and its long-term prospects.
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Mondi’s current establishment in Turkey includes a recycled containerboard paper mill and four plants of corrugated packaging. The company has three sites of flexible packaging. The acquisition supplements the business of the company as it can leverage its expertise and experience in Turkey market. The company can create substantial operational improvements and paper integration benefits when combined with its global virgin and reprocessed containerboard range.
Olmuksan, for the year ended 30 September 2020, has produced 256,000 tonnes of corrugated packaging through its chain of five plants, which provides a diverse customer base with high-quality, sustainable packaging for agriculture, industrial applications as well as food and beverage. The company had generated revenues of TRY1,093 million (€150 million) in the same period.
Andrew King, Group CEO of Mondi, expressed his excitement on this unique opportunity and commented that this acquisition would considerably strengthen the company’s position in the booming Turkish corrugated market viz-a-viz enlarging the company’s offering to present and new customers in the country.
Shares of Mondi Plc (LON:MNDI) ended at GBX 1,740.00. The market cap of the company stands at GBP 8,448.64 million, and it has given a return of 0.75 per cent in the last one year.
