Smurfit Kappa PLC (LON:SKP) has agreed to buy Dutch paper and recycling firm Reparenco for around €460mln (US$539mln) in a move designed to counter a takeover bid from US rival International Paper (NYSE:IP).
The FTSE 100-listed Irish packaging group said the acquisition of the privately-owned Dutch business will accelerate its strategic objectives under a four-year plan laid out in February.
The company said negotiations to buy the business began on February 1, before IP made its first bid approach.
In a statement, Smurfit’s chief executive Tony Smurfit said: "The acquisition of Reparenco is complementary with our existing business; strengthens our integrated business model; and accelerates a central element of our medium term plan."
Smurfit Kappa has twice rejected bids which would combine the largest listed US paper packaging firm with Europe's biggest, arguing it was better served pursuing its future independently.
IP, whose cash and shares offer in March valued the Irish firm at €8.9bn, said last week, it would not make a hostile move after being given until June 6 by Irish takeover authorities to make a binding offer or walk away.
The latest twist in the takeover saga comes after the Financial Times reported on Wednesday that a trio of Smurfit shareholders have asked the Irish firm to enter into talks with IP.
The newspaper quoted fund manager Janus Henderson, which holds a 4.3% stake, as saying Smurfit should either get around the table to seek a higher price or explain why it was not engaging.
In a note to clients, analysts at RBC Capital said: “The acquisition of Reparenco doesn't necessarily preclude SKG and IP engagement on the proposed takeover by IP but it does complicate matters further.
“In addition, while SKG management did not address the IP takeover on a call regarding the Reparenco deal, CEO Tony Smurfit reiterated that the board was unanimous in rejecting IP's unsolicited approach.”
In late afternoon trading in London, Smurfit Kappa shares were down 0.1% at 3,022p, while in early morning New York trading, IP shares lost 1% at US$54.24.
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