The UK Office of Fair Trading (OFT) said Friday it was assessing the anticipated acquisition as it invited interested parties to comment on the proposed deal.
DS Smith announced its intention on 9 July to buy corrugated packaging company Otor for €247m (₤207m) in a bid to expand its French market share and boost its overall European position.
Under the terms of the deal, DS Smith would initially acquire more than 95 per cent of Otor’s shares from The Carlyle Group before making an offer for the remaining shares under French financial law. The company said it expected the deal to be completed in the fourth quarter of 2010 subject to regulator and shareholder approval.
The OFT has set a deadline of 22 July for those wishing to make their views known on the purchase by contacting Dimitrios Sinaniotis on 0044 207 211 8911 or via email at firstname.lastname@example.org
The body forecast announcing its decision by 2 September, 2010.
Otor specialises in manufacturing recycled corrugated board packaging mainly for transportation and sale of food products. It has a turnover of €315m and employs 560 people across15 sites in France.
DS Smith said the acquisition would meet key strategic goals for the company, including a reduced reliance on the UK market and an enlarged presence in the large and more resilient fast moving consumer goods (FMCG) segment of the French corrugated French sector.
After the initial €3m rationalisation and integration costs, DS Smith forecast annual synergies from the takeover would reach €9.3m and be fully achieved within the second full year of ownership.
“These synergies are expected to arise from cost reduction principally through the elimination of duplicate head office costs and other functions, purchasing optimisation and bringing out-sourced services in house”, said a DS Smith statement.