European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>The EU's new regulatory framework tightens scrutiny on mergers and acquisitions, especially those involving foreign subsidies, to prevent competitive imbalances within its single market and promote fair competition.</li>
<li>From October 2023, companies generating over €500 million in EU revenue and receiving foreign subsidies must notify the European Commission to ensure compliance under the Foreign Subsidies Control.</li>
<li>In its first year, over 100 companies notified acquisitions under the EU’s new regulation, reflecting its broad impact and the Commission’s stricter approach to non-EU subsidy influence in the market.</li>
</ul>


The EU's new regulatory framework tightens scrutiny on mergers and acquisitions, especially those involving foreign subsidies, to prevent competitive imbalances within its single market and promote fair competition.
From October 2023, companies generating over €500 million in EU revenue and receiving foreign subsidies must notify the European Commission to ensure compliance under the Foreign Subsidies Control.
In its first year, over 100 companies notified acquisitions under the EU’s new regulation, reflecting its broad impact and the Commission’s stricter approach to non-EU subsidy influence in the market.


Enhanced Regulatory Scrutiny of M&A in the EU

<ul>
<li>Following the withdrawal of <a href="https://www.smartkarma.com/entities/mondi-plc" target="_blank" data-smartkarma-citation="entities:22048:1" rel="noopener">Mondi PLC (MNDI LN)</a> from the contest to acquire <a href="https://www.smartkarma.com/entities/ds-smith-plc" target="_blank" data-smartkarma-citation="entities:22150:1" rel="noopener">DS Smith PLC (SMDS LN)</a>, the gross spread to the deal turned negative (from &gt;10%).</li>
<li>At the median 7.07x EV/Fwd NTM EBITDA (within the range of former transactions), the implied equity value of DS Smith would be 388.4p. (vs. an IBES consensus TP of 395p).</li>
<li>IP is giving away most of the synergies. Spread is 1.91%/2.86% (gross, annualized assuming settlement by Y/E). I would wait for the spread to widen, before setting it up.</li>
</ul>


Following the withdrawal of Mondi PLC (MNDI LN) from the contest to acquire DS Smith PLC (SMDS LN), the gross spread to the deal turned negative (from &gt;10%).
At the median 7.07x EV/Fwd NTM EBITDA (within the range of former transactions), the implied equity value of DS Smith would be 388.4p. (vs. an IBES consensus TP of 395p).
IP is giving away most of the synergies. Spread is 1.91%/2.86% (gross, annualized assuming settlement by Y/E). I would wait for the spread to widen, before setting it up.


<ul>
<li>Gross spread (as of 13 March closing) on an estimated 1 <a href="https://www.smartkarma.com/entities/mondi-plc" target="_blank" data-smartkarma-citation="entities:22048:1" rel="noopener">Mondi PLC (MNDI LN)</a> x 0.2701 <a href="https://www.smartkarma.com/entities/ds-smith-plc" target="_blank" data-smartkarma-citation="entities:22150:1" rel="noopener">DS Smith PLC (SMDS LN)</a> exchange equation is 5.6%. New PUSU is 4 April.</li>
<li>The merger would create a European board and packaging giant. Interloper risk seems low, as are the chances of the deal being contested by antitrust regulators. </li>
<li>Mondi and DS Smith are verifying the anticipated synergies resulting from their combination. Considering synergies of 3% of DS Smith revenues, the present value might not cover the premium offered.</li>
</ul>


Gross spread (as of 13 March closing) on an estimated 1 Mondi PLC (MNDI LN) x 0.2701 DS Smith PLC (SMDS LN) exchange equation is 5.6%. New PUSU is 4 April.
The merger would create a European board and packaging giant. Interloper risk seems low, as are the chances of the deal being contested by antitrust regulators. 
Mondi and DS Smith are verifying the anticipated synergies resulting from their combination. Considering synergies of 3% of DS Smith revenues, the present value might not cover the premium offered.


Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

Coca-Cola Europacific Partners / Index Rebalance

<ul>
<li>In this insight, we take a look at the potential index changes for the F100 and F250 indices in the run-up to the March 2025 index rebal event.</li>
<li>We see up to four M&amp;A-related intra-review changes in the run up to the March 2025 review.</li>
<li>Our latest estimates suggest there could be one regular change for the F100 index and one change for the F250 index during the March 2025 rebalance. </li>
</ul>


In this insight, we take a look at the potential index changes for the F100 and F250 indices in the run-up to the March 2025 index rebal event.
We see up to four M&amp;A-related intra-review changes in the run up to the March 2025 review.
Our latest estimates suggest there could be one regular change for the F100 index and one change for the F250 index during the March 2025 rebalance. 


Quiddity Leaderboard F100/F250 Mar 25: Mega Addition for Coke & Multiple Intra-Review Changes Likely

<ul>
<li>In this insight, we take a look at the potential index changes for F100 and F250 in the run-up to the December 2024 index rebal event.</li>
<li>Currently, we see three F100 changes and four F250 changes. Some of these index change expectations are related to the changes made to the UK Listing Rules in June 2024.</li>
<li>The final changes will be decided based on 3rd December 2024 closing prices.</li>
</ul>


In this insight, we take a look at the potential index changes for F100 and F250 in the run-up to the December 2024 index rebal event.
Currently, we see three F100 changes and four F250 changes. Some of these index change expectations are related to the changes made to the UK Listing Rules in June 2024.
The final changes will be decided based on 3rd December 2024 closing prices.


Quiddity Leaderboard F100/250 Dec 24: LONGs Up 10% Vs Index in a Month; Time for New Trade

United Kingdom

DS Smith Plc is an International paper company focused on packaging and office products. The Group collects waste paper, manufactures paper, converts corrugated packaging and produces bag-in-box, plastic corrugated and heavy duty corrugated packaging, as well as wholesales office supplies.

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DS Smith PLC (SMDS LN)

Enhanced Regulatory Scrutiny of M&A in the EU

The EU's new regulatory framework tightens scrutiny on M&A, especially those involving foreign subsidies, to prevent competitive imbalances within...

Jesus Rodriguez Aguilar

International Paper/DS Smith: Spread

Following the withdrawal of Mondi from the contest to acquire DS Smith, the IP/SMDS gross spread to the deal turned negative (from +10%)....

Jesus Rodriguez Aguilar

Spread on Paper so Far

Merger between Mondi PLC and DS Smith PLC could create a European packaging giant with low interloper risk and antitrust concerns, but potential...

Jesus Rodriguez Aguilar

Quiddity Leaderboard F100/F250 Mar 25: Mega Addition for Coke & Multiple Intra-Review Changes Likely

There are multiple possibilities of intra-review index changes for the F100/250 family in 1Q CY2025. It might be a good idea to revisit this insight.

Janaghan Jeyakumar, CFA

Quiddity Leaderboard F100/250 Dec 24: LONGs Up 10% Vs Index in a Month; Time for New Trade

The Top 10 F250 potential ADDs from the last insight have outperformed the F250 index by 10% since 24th October 2024. It might be time to revise...

Janaghan Jeyakumar, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Enhanced Regulatory Scrutiny of M&A in the EU

The EU's new regulatory framework tightens scrutiny on M&A, especially those involving foreign subsidies, to prevent competitive imbalances within...

Jesus Rodriguez Aguilar

International Paper/DS Smith: Spread

Following the withdrawal of Mondi from the contest to acquire DS Smith, the IP/SMDS gross spread to the deal turned negative (from +10%)....

Jesus Rodriguez Aguilar

Spread on Paper so Far

​Merger between Mondi PLC and DS Smith PLC could create a European packaging giant with low interloper risk and antitrust concerns, but potential...

Jesus Rodriguez Aguilar

Quiddity Leaderboard F100/F250 Mar 25: Mega Addition for Coke & Multiple Intra-Review Changes Likely

There are multiple possibilities of intra-review index changes for the F100/250 family in 1Q CY2025. It might be a good idea to revisit this insight.

Janaghan Jeyakumar, CFA

Quiddity Leaderboard F100/250 Dec 24: LONGs Up 10% Vs Index in a Month; Time for New Trade

The Top 10 F250 potential ADDs from the last insight have outperformed the F250 index by 10% since 24th October 2024. It might be time to revise...

Janaghan Jeyakumar, CFA

Merger between Mondi PLC and DS Smith PLC could create a European packaging giant with low interloper risk and antitrust concerns, but potential...