Irish packaging firm Smurfit Kappa has turned down an acquisition bid from US-based International Paper Company.

Smurfit Kappa motivated the decision by claiming that the proposal worked against its interests of operating as an independent company serving the European and US markets.

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The Smurfit Kappa board has, therefore, unanimously rejected the ‘opportunistic’ offer and advised its shareholders to take no action in these regards.

The company further said that the bid underrates the group’s asset, franchise and replacement value.

Smurfit Kappa chairman Liam O’Mahony said: “It does not reflect the group’s true intrinsic business worth or its prospects.

“The group has a proven management team, which we believe will deliver significantly greater value for shareholders on a standalone basis.”

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“It does not reflect the group’s true intrinsic business worth or its prospects.”

Under the terms of the proposal, which valued the Irish firm at €8.6bn, International Paper is said to have offered a shareholding of around 15% in the combined entity to Smurfit Kappa shareholders, in addition to cash consideration.

International Paper said that the transaction would result in synergies and allow it to offer improved services to both local and global customers.

The offer was made last month and included €22 in cash and 0.3028 new International Paper common stock shares to Smurfit’s shareholders for each share held.

The Ireland-based company said that it intends to capitalise on the growing European demand for paper-based packaging instead of plastic, growth in e-commerce, as well as rising request for shelf-ready packaging.

The takeover bid comes after Smurfit Kappa unveiled plans to invest €1.6bn to bolster growth prospects.

The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) for last year stood at €1.24bn.