DS Smith To Acquire France's Otor To Boost European Ops

7th Jul 2010 07:28

LONDON (Dow Jones)--Packaging company DS Smith PLC (SMDS.LN) Wednesday said it agreed to acquire a French packaging business from Carlyle Group LP for EUR247 million to bolster its presence in continental Europe. The purchase of Otor SA, a recycled corrugated packaging manufacturer, will provide DS Smith with a strong business making corrugated packaging for the fast-moving consumer goods sector in Europe, the company said. DS Smith added the acquisition will also give it a broader customer base and boost earnings in the first full-year of ownership. The company said it expects to achieve cost savings of about EUR9.3 million by the second year of ownership through synergies, which involve combining similar operations and other measures. DS Smith said it agreed to buy Otor for EUR247 million in cash. It will acquire the 95% of the company owned by Carlyle Group, Credit Lyonnais SA and Otor's Chairman before making a mandatory offer for the remaining shares. To help fund the acquisition, DS Smith Wednesday said it intends to sell 39.3 million new shares through a type of auction called a bookbuild. The amount raised and the price at which the shares will be sold will be known later Wednesday. -By Jason Douglas, Dow Jones Newswires; 44-20-7842-9272; [email protected] (END) Dow Jones Newswires July 07, 2010 02:28 ET (06:28 GMT)