Oct 9 (Reuters) - British paper and packaging firm Mondi ( MNODF )

has agreed to buy the German, Benelux and UK packaging

assets of Schumacher Packaging for 634 million euros ($695.6

million), including debt, to expand in Western Europe, it said

on Wednesday.

WHY IT'S IMPORTANT

There has been increasing consolidation in the paper and

packaging sector as companies recover from a decline in demand

due to customer destocking following a boom in packaging sales

during the pandemic.

Firms such as Mondi ( MNODF ) are looking to expand their

footprint in Europe. Earlier this year, it dropped out of a

takeover bid for rival DS Smith ( DITHF ) after U.S. peer

International Paper Co ( IP ) outbid it.

Ireland's Smurfit Kappa has also agreed to buy U.S.

rival WestRock.

KEY QUOTES

"This acquisition significantly increases our corrugated

converting capacity, extends our reach across Western Europe,

and offers strong downstream integration opportunities," Mondi ( MNODF )

CEO Andrew King said in a statement.

WHAT'S NEXT?

Mondi ( MNODF ) said the deal is expected to add to its earnings in

the first full year after the deal close, which expected in the

first-half of 2025.

The London-listed firm will report its third-quarter trading

update on Oct. 17, as planned, it said.

($1 = 0.9114 euros)