The Smurfit group is planning to spend £18 million sterling to complete its acquisition of Norcor Holdings, a British packaging group in which it has held a 29.95 per cent stake since 1997.

The consideration reflects a slight discount of 0.7 per cent on Norcor's middle market share price of 67.5p at the close of business on Tuesday. In addition to its existing stake, Smurfit has irrevocable acceptances from LINPAC Group in relation to its 21.84 per cent stake - thus giving it over 50 per cent - and the company board has recommended shareholders to accept.

Smurfit said the offer of 65p per share and a 2p per share dividend represented a premium of about 65.4 per cent over Norcor's closing price of 40.5p on November 22nd, a day before Smurfit's initial approach to Norcor's board.

The deal gives Smurfit leverage to strengthen its position in the British market, its chief financial officer, Mr Gary McGann, said last night. "The company benefits from being part of a bigger operation." Smurfit was an "excellent fit" for Norcor, Mr McGann said, adding that the firm hoped to gain from synergies in terms of product range, marketing and distribution.

This was particularly so in the context of continued difficulties in the British market for corrugated board in general, Mr Mc Gann added. "We're focused on trying to address those difficulties."

Two factors were causing particular problems. Firstly, the strength of sterling gave it increased purchasing power in markets outside Britain, leaving manufacturers facing increased exposure to imports. Secondly, the packaging industry was suffering due a weakness in British industry, which was going through a "very tough time".

Mr McGann said: "We're closely aligned to the general well-being of industry."

LINPAC, another British packaging group, held more than 21 per cent of Norcor in a stake built up in 1998.