UK packaging company David S Smith, which failed in its bid to take over Dutch competitor KNP, is now a potential takeover target, according to City analysts.
The £1bn sale of KNP, Europe’s third largest packaging producer, to UK venture capital companies CVC and Cinven this week is not expected to end consolidation within the packaging sector. Raw material prices have increased without pushing up end-product prices, despite volume growth.
‘Mergers are certainly the flavour of the month and Smith may want to swallow someone else,’ the analyst said. ‘But they are duty bound to consider they may be a target.’
Smith, capitalised at £660m, had initially bid £900m for KNP and would have required a venture capital partner.