Mondi‚ which had a market value of R83.8bn will join two other newcomers to the FTSE 100 - Greek bottling company Coca-Cola Hellenic and the UK's largest sports retailer‚ Sports Direct.
Off the list are the UK services group Serco‚ Kazakhstan mining company Eurasian Natural Resources and British energy services firm John Wood Group.
"The move into the blue-chip index will raise Mondi's profile on international markets and increase its pool of investors given the FTSE 100 is one of the most prestigious and widely followed indices‚" said Ryan Wibberley‚ Investec Asset Management's head of equity dealing for emerging markets.
Since listing on the London Stock Exchange in June 2007‚ following its unbundling from former parent Anglo American‚ Mondi's share price has surged more than 120%. Over the same period‚ Anglo‚ which is also listed in London and is on the FTSE 100‚ has seen its share price slump 49%.
London-based investment banking firm Jefferies equity analyst Justin Jordan said Mondi had a "very consistent strategy" since the de-merger. This had helped the company improve earnings.
"Its primary focus has been on the return on capital‚ which has seen earnings per share grow by an average 20% a year‚" Jordan said.
According to Jordan‚ the main drivers of Mondi's success have been the disposal of non-core assets‚ product innovation‚ mergers and acquisitions in high-growth areas and investment in its major mills.
Mondi's operations span 30 countries‚ with key plants in Eastern Europe‚ Russia and South Africa. It derives around 12% of its revenues from its South African operations.
Falling paper consumption in developed markets has had a marked effect on Mondi rival Sappi. Its share price has fallen 16.57% since January. Earlier this week‚ Sappi said it would de-list its American depositary shares from the New York Stock Exchange‚ with effect from the end of September.
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