The acquisition has an enterprise value of €634m (£531m) and encompasses Schumacher’s corrugated converting and solid board operations in the UK, Benelux and Germany, which is the biggest part of the operation and home to two “state-of-the-art mega-box plants”.
Over the summer the Schumacher family announced a divestment strategy for its circa €1bn turnover operations in the face of growing competition from giant global groups many times its size.
It has already agreed to sell its Polish subsidiary to Saica Group.
Mondi had sales of €7.3bn last year. It is buying seven corrugated converting plants, two solid board mills and four solid board converting plants from Schumacher.
The UK operation in Birmingham is home to a Koenig & Bauer Durst Delta SPC 130 single-pass inkjet press for corrugated packaging.
Most of the sites are in Germany, which Mondi hailed as the largest packaging market in Europe, and a key expansion target for its Mondi eCommerce offering.
The Western Europe operations achieved adjusted EBITDA of €66m last year. Mondi said this was expected to increase as new capacity at the Greven site in Germany ramps up. It also expects to achieve €22m of cost synergies over three years, post-completion which is slated for H1 2025.
One-off cash costs related to the deal will be approximately €18m.
Mondi Group CEO Andrew King said the business was focused on driving value by investing to meet growing demand for sustainable packaging.
“This acquisition significantly increases our corrugated converting capacity, extends our reach across Western Europe, and offers strong downstream integration opportunities, while broadening our customer offering with a complementary fibre-based product range,” he commented.
“We are delighted to be acquiring these assets and look forward to welcoming our new Schumacher Packaging colleagues and customers to Mondi. On completion, Mondi will have an enhanced customer proposition and a strong platform for further growth.”
Schumacher co-CEOs Björn Schumacher and Hendrik Schumacher will not cut ties with the business.
Björn Schumacher will be retained as a strategic adviser and Hendrik Schumacher will become chief operating officer for solid board, “to ensure a smooth transition and support the ongoing development of the combined business”.
Shares in Mondi rose by 3.56% following the news, to 1,454.34p (52-week high: 1,618.00p, low: 1,224.00p.
Mondi currently employs 22,000 people across 100 production sites primarily in Europe, North America and Africa.
Mega consolidation plays in the packaging space over the past year have included the merger of Smurfit Kappa with WestRock, and the ongoing deal to combine International Paper and DS Smith.
Back in March Mondi had agreed terms for a possible all-share offer for DS Smith in March, but Mondi pulled out of the takeover race shortly after the International Paper offer was made public.
When the Mondi-Schumacher deal completes, Schumacher’s remaining production operations will comprise the Cartiere Modesto paper mill in Italy and a packaging site in the Czech Republic.
