Jefferson Smurfit Group has agreed to sell Smurfit Tobacco Products, its European tobacco packaging operations, to Amcor, the Australian print and packaging group, for an undisclosed sum. Smurfit Tobacco Products has two plants; one in Dublin which employs 85, and the other in Belfast which employs 110. Combined they have a turnover of some £37 million (€47 million), so the consideration is not material to the group. The agreement is to sell the Dublin plant immediately and the Belfast plant mid-2000.

Mr Russell Jones, Amcor's managing director, said both plants had excess capacity which would be utilised immediately. "This not only enhances returns but also enables us to meet the growth in demand. Amcor intends to transfer business from Continental Europe into the Dublin plant, which will increase employment modestly," a spokesman for Amcor said. The number of additional jobs was not specified.

A spokesman for Smurfit said the group had not got a big presence in tobacco packaging and noted the consolidation that was taking place in the industry.

Mr Jones said the acquisition by Amcor was a perfect strategic fit with its existing tobacco business. It strengthened the company's position in Europe by providing manufacturing facilities in the Republic and Northern Ireland. "This geographic spread is especially important for our relationships with the major tobacco companies. Also, the acquisition meets our return criteria and reinforces our position as the number one global tobacco packaging supplier."

Amcor shares are listed in Australia, New Zealand and on the Nasdaq.