Multinational sustainable packaging and paper producer Mondi has entered into an agreement to acquire the German, Benelux and UK corrugated converting and solid board operations of Schumacher Packaging.

This acquisition of Schumacher Packaging’s western European packaging assets will expand Mondi’s corrugated footprint in western Europe and add complementary fibre-based products, focussed on e-commerce and fast-moving consumer goods.

Mondi, which is listed on the JSE and the LSE, said the acquisition was in line with its strategy to expand its corrugated packaging business in Europe and adjacent markets by investing in cost-advantaged assets to further integrate upstream and downstream operations that will ensure security of supply for customers and optimised operations.

The acquisition comprises seven corrugated converting plants, two solid board mills and four solid board converting plants. These operations, which have an enterprise value of €634-million, complement Mondi’s existing network of corrugated plants across central and eastern Europe, adding more than one-billion square metres of capacity when fully operational.

Among the acquired sites are two large-scale box plants in Germany, located at Ebersdorf and Greven, which possess high production speeds and operational efficiencies, as well as a skilled workforce with a culture aligned with Mondi’s.

Mondi said the expansion of its e-commerce offering, particularly in Germany, which was the largest packaging market in Europe, presented an opportunity to introduce its products to more customers as they transition towards more sustainable packaging options.

In 2023, Schumacher Packaging’s western European packaging assets delivered adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) of €66-million.

The Ebitda contribution is expected to increase as the recently added capacity at Greven, which followed a significant investment programme, ramps up, and the identified €22-million of cost synergies are realised over the three years following completion. This excludes expected one-off cash costs to achieve of about €18-million.

"Our focus is on investing to meet the growing market 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.

“On completion, Mondi will have an enhanced customer proposition and a strong platform for further growth,” Mondi group CEO Andrew King said on October 9.

The transaction, which is subject to certain customary regulatory approvals, is expected to close in the first half of next year.

Schumacher Packaging co-CEOs Bjoern Schumacher and Hendrik Schumacher will be retained as strategic adviser and solid board COO, respectively.

Mondi will publish its third quarter trading update on October 17.