DS Smith is set to be acquired by US rival, International Paper, after a takeover deal valued at £5.8bn was agreed.

Upon completion of the combination deal, shareholders at the FTSE 100-listed packaging firm will hold approximately 33.7% of the firm, with shareholders at the Tennessee-based International Paper owning 66.3% of shares.

International Paper also stated that it intends to seek a secondary listing on its shares on the London Stock Exchange.

The boards at both companies believe the combination will "create a truly global leader in sustainable packaging solutions" across Europe and North America and combines the expertise of "two experienced and innovative management teams to accelerate innovate and sustainable solutions and products for all customers".

As part of the move, International Paper has identified around 400 job roles across the two firms that appear to be duplicative, and therefore may result in a "headcount reduction".

However, the firms did state that any such headcount reduction will focus on corporate head office and senior management positions across both businesses.

Group chief executive at DS Smith, Miles Roberts, said: "DS Smith has grown significantly through a dedication to customers, focus on innovation, quality of packaging and high levels of service.

"In a dynamic sustainable packaging landscape, the combination will enhance our global proposition to customers, create opportunities for colleagues and drive value for shareholders who can remain fully invested in such an exciting business."

Head of financial analysis at AJ Bell, Danni Hewson, commented: "Given the offer is an all-share deal, it’s interesting to note that UK investors in DS Smith might not need to fret about owning foreign shares. International Paper is looking at a secondary listing of its shares on the London Stock Exchange which means DS Smith investors inheriting the US company’s stock through the takeover would still be able to retain exposure to the enlarged group via UK-listed shares.

"That’s a positive step and good for the reputation of the UK stock market that a US firm sees value in having a London presence, even though this type of listing means it wouldn’t qualify for the FTSE 100.

"International Paper might have also taken the view that offering UK-listed stock would help get the takeover over the line. Historically, certain share-based deals have failed because UK investors didn’t want foreign stock."

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