Packaging giant DS Smith is to return to the London stock market in a boost for the City – just a year after it was taken over by US rival International Paper (IP).
Tennessee-based IP will spin off its Europe, Middle East and Africa (EMEA) division in a deal expected to complete within 12 to 15 months.
The new company is expected to be called DS Smith and will have a primary listing on the London Stock Exchange as well as being listed in New York.
It represents a reversal of the dismal trend of the UK’s listed companies being hoovered up by foreign predators.
And it will add to optimism for the London market this year as hopes build of initial public offerings (IPOs) following a dearth in recent years.
DS Smith, founded in London in 1940, went public in the UK in the 1950s but disappeared from the UK market when it was acquired by IP for £5.8billion a year ago.
Wrapped up: Tennessee-based IP, which took over DS Smith a year ago, will spin off its Europe, Middle East and Africa division in a deal expected to complete within 15 months
In May, IP announced plans to close five sites in the UK, putting about 300 jobs at risk, to cut costs.
The division to be spun off following yesterday’s announcement will largely consist of the old DS Smith business together with IP’s other assets in the EMEA region, leaving the parent company to concentrate on North America.
It will retain a ‘meaningful ownership stake’ in the revived DS Smith, which will operate across 30 countries.
DS Smith’s return is the latest boost for the London market after the FTSE 100 passed the 10,000 mark – with investors looking for opportunities outside the US as Donald Trump’s chaotic policy-making causes havoc.
There is speculation motoring organisation the RAC, bookseller Waterstones and travel platform Love Holidays will float in the UK this year.
Norwegian software group Visma is thought to be in the running for a potential £16bn listing while Uzbekistan miner Navoi is believed to be eyeing a London IPO.
Marco Amitrano, UK boss of PwC, said there were ‘materially’ more firms looking to debut in London this year.
IP boss Andy Silvernail said its North America and EMEA businesses are at different stages of their transformation, and it was time to create ‘two independent, regionally focused companies’.
The move is expected to boost the US firm’s earnings at a time when demand for box shipments has slowed amid cautious consumer spending, a weak housing market and tariff uncertainties.
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