SKG signs €51m asset swap agreement

Smurfit Kappa Group has signed an asset swap agreement with paper maker Mondi with a total cash cost of €51 million.

Under the deal SKG will acquire Mondi's corrugated operations in the United Kingdom, which includes three corrugated box plants, for a consideration of €43 million. The facilities reported a combined EBITDA of €8 million in 2009, and profit before tax of €2 million.

Mondi, meanwhile, will get SKG's Western European sack converting operations, which comprises four plants in France, three in Spain, and one in Italy. A number of sales offices are also included int he disposal. The operations reported an EBITDA loss of €4.4 million in 2009, and a loss before tax of €12.6 million.

The disposal will see SKG incur write-offs of about €30 million.

SKG chief executive Gary McGann said the asset swap would strengthen the group's position in its core corrugated packaging grade.