Stora Enso gets nod to acquire De Jong Packaging Group

Acquisition expected to be finalized at the beginning of 2023

Stora Enso
The acquisition will strengthen Stora Enso’s European market presence in corrugated packaging. Photo Stora Enso

Stora Enso has received regulatory approval from the EU Commission to proceed with the acquisition of the Netherlands-based De Jong Packaging Group, announced in September 2022. Closure of the transaction is still ongoing and expected to be finalized at the beginning of 2023.

Stora Enso had acquired De Jong for an enterprise value of approximately 1,020 million euros, Packaging South Asia had written on 1 October. This acquisition will advance Stora Enso’s strategic direction, accelerate revenue growth, and build market share in renewable packaging in Europe. 

The De Jong Packaging Group is one of the largest corrugated packaging producers in the Benelux countries. Its product portfolio and geographic presence will complement and enhance Stora Enso’s offering, especially in fresh produce, eCommerce, and industrial packaging.

The acquisition will strengthen Stora Enso’s European market presence in corrugated packaging and provide an entry into the Netherlands, Belgium, Germany, and the UK. 

With this acquisition, Stora Enso’s Packaging Solutions division will increase its corrugated packaging capacity by approximately 1,200 million m2 to more than 2,000 million m2, including De Jong’s ongoing expansion projects. This will secure a platform for continued growth in key markets. The European corrugated packaging market is fragmented, with local presence key for sustainable growth.

The enterprise value of the transaction is approximately 1,020 million euros of which 250 million euros are IFRS lease liabilities. The enterprise value corresponds to a multiple of 8.9, based on an adjusted EBITDA of 114 million euros for 2022. In 2025, when the ongoing expansion projects in packaging conversion are ramped up, an additional EBITDA of 40 million euros is estimated to be delivered. 

In the mid-term, after three years, the acquisition is expected to generate average annual synergies of 30 million euros over the cycle, mainly through sourcing, containerboard integration optimization, and commercial opportunities. If Stora Enso decides to proceed with the currently studied conversion of the Langerbrugge paper production site in Belgium to containerboard, further synergies will be possible. Stora Enso may in 2024, make a maximum additional earn-out payment in cash of 45 million euros, subject to De Jong Packaging Group achieving certain earnings thresholds. 

De Jong Packaging Group’s full year 2022 sales are estimated at approximately 1 billion euros.   Closure of the transaction is expected at the beginning of 2023, subject to employee consultation and regulatory approval. Stora Enso’s full year 2022 operational EBIT guidance remains unchanged.

In line with our strategy, we are investing in growing our market share in renewable and circular packaging solutions. De Jong Packaging has a solid presence in the corrugated packaging sector and an impressive customer base. Acquiring their operations supports our future strategic direction to advance renewable packaging solutions within Europe,” Annica Bresky, president and CEO at Stora Enso had said.

We are excited about this acquisition. With our shared focus on agility and customer value, and with the excellent teams in both companies, we will create a strong platform for future growth. De Jong Packaging Group has a solid track record of growth in corrugated packaging, which combined with our experience in innovative design, digital solutions, and sustainability services, will enable us to strengthen our offering,” David Ekberg, EVP Packaging Solutions division at Stora Enso, had said.

“We are proud of what has been achieved at De Jong Packaging Group and we now look forward to the next steps in our company’s journey. Stora Enso is well positioned to drive further growth in line with our common ambition,” stated Henk de Jong, owner of De Jong Packaging Group, and Ad Smit, CEO of De Jong Packaging Group. 

Founded in 1996, De Jong Packaging Group is one of the largest corrugated packaging producers in the Benelux countries. The company specializes in corrugated trays and boxes mainly for fresh produce, e-commerce, and industry. 

De Jong Packaging Group is active in container board production through the acquisition of the De Hoop paper mill in the Netherlands in 2021. It has 17 sites in the Netherlands, Belgium, Germany, and the UK.   

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