DAVY VIEW

Mondi has confirmed that it is in the early stages of a possible ‘all share combination’ with DS Smith. We believe a merged ‘Mondi Smith’ group would be (1) more vertically integrated in containerboard to box production, delivering (2) more stable through cycle returns with (3) potential €200m ‘Mondi Smith’ merger synergies. Pre-details of potential ‘all share combination’ terms, we reaffirm our ‘Outperform’ view on DS Smith and our ‘Neutral’ view on Mondi.