International Paper is still on track to split into two geographically-oriented companies by the first quarter of 2027 or sooner, executives confirmed during a capital markets day Tuesday.
But they still did not signal whether Memphis, Tennessee-based IP would sell the London-based spinoff, after it disclosed in recent weeks that unsolicited bids had cropped up.
IP acquired DS Smith in January 2025 and announced in January 2026 that it would split into two independent companies. The legacy North American assets from both companies will be part of International Paper, and the legacy European assets will be part of DS Smith. The new company has 14 paper mills and approximately 180 packaging sites.
Tuesday’s event largely focused on the streamlining efforts underway to make the EMEA business more profitable prior to spinning it off as DS Smith. Executives repeatedly highlighted three tenets in the transformation journey: cutting costs, disciplined reinvestment and prioritizing customer relationships.
“How do we combine the best from both and create a better organization?” said Tim Nicholls, president of DS Smith, who is widely expected to become that company’s CEO after the split; he was previously IP’s CFO.
The optimization has involved numerous site closures, workforce reductions and strategy revamps during the more than a year and a half since International Paper acquired DS Smith. The mid-term focus is for organic investments such as facility upgrades.
“We haven't simply focused on improving the business we have. We have fundamentally redesigned our business to make it stronger, simpler and more competitive,” said DS Smith’s Ana Soldo, managing director for East EMEA.
As part of the optimization, DS Smith is shifting where approximately 13% of the product volumes it brings to market are produced within its network. “We are putting in place also this movement of machinery to create sites which really can welcome the right production to give the right productivity,” said Stefano Rossi, CEO of packaging at DS Smith.
Yet cost inflation continues to stress margins, and the European market continues to be soft. While DS Smith executives anticipate earnings before interest, taxes, depreciation and amortization will be lower in 2026, they project financial benefits in 2027, including from announced price increases. The company is striving for 1% to 2% volume growth in 2027.
While legacy DS Smith grew rapidly via acquisitions — 17 in the 10 years prior to being acquired by IP in 2025— the near- to mid-term focus will be on organic growth. Company executives do not expect to engage in any mergers or acquisitions for at least two years following the spinoff.
The company still has cost-saving opportunities ahead, Nicholls said, likely to the tune of 200 million euros. Executives emphasized repeatedly that the efforts to transform DS Smith will continue in the coming months.
“I don’t think in my 40 years I've seen another company having the courage to take such an impressive transformation at once, and especially not in such a short period of time,” said Rossi.
