Sustainable packaging solutions provider International Paper (IP) is set to receive approval from the EU for its £5.8bn ($7.12bn) acquisition of UK competitor DS Smith.

Citing sources familiar with the matter, Reuters reported that the move comes after IP agreed to sell certain assets to resolve competition concerns.

The European Commission is expected to make a formal decision on the deal by Friday (24 January).

In March last year, IP made an all-share offer to acquire the entire issued share capital of the British packaging company DS Smith.

Under the proposed terms, DS Smith shareholders were to receive 0.1285 shares in IP for each share they owned in DS Smith.

The all-share transaction would result in DS Smith’s shareholders owning approximately 33.8% of the combined entity.

Later in June, DS Smith and IP announced that their proposed merger had reached a significant milestone with the expiration of the waiting period under the US Hart-Scott-Rodino Act.

In October, IP secured shareholder approval for its proposed acquisition of DS Smith, marking a significant step towards finalising the deal.

The deal, now awaiting approval from the European Commission, is expected to enhance IP's presence in the European paper and packaging sector, which is undergoing consolidation.

DS Smith was established in the 1940s as a box-making business in East London. Since then, it has broadened its services to include solutions such as recycling and paper manufacturing.

It currently operates in more than 30 countries, offering packaging, paper, and recycling services to businesses.