Shares in sustainable packaging provider DS Smith (LSE: SMDS) soared 10.4% on Thursday after the company revealed it had received a “highly preliminary expression of interest” from global peer Mondi (LSE: MNDI) regarding a possible £10 billion merger.
In a brief statement, DS Smith said that while no formal offer has been received at this point, its board understands Mondi is in the early stages of considering making an offer for the company. It noted the March 7th put-up-or-shut-up deadline for Mondi under UK takeover regulations.
DS Smith said its announcement came in response to media speculation and was made without approval from Mondi.
For its part, Mondi stated its belief that acquiring DS Smith could present an exciting opportunity to create an industry leader in paper-based sustainable packaging but added any deal would need to meet its strict capital allocation criteria.
Mondi shares closed 3.2% lower. Both companies are FTSE 100 constituents.