Freedonia Analyst Discusses Greif's Agreement to Acquire Caraustar Industries
11 January 2019
On December 20, 2018, Greif, Inc., a leading industrial packaging company, announced that it had entered into a definitive agreement to acquire Caraustar Industries in a deal valued at $1.8 billion.
Through the acquisition, Greif will bolster its position in the paper packaging market with Caraustar's 80 facilities. These properties include operations that are new to Greif, such as coated and uncoated recycled paperboard, and folding cartons and set-up boxes for consumer markets. According to Freedonia analyst Chad Henry, "In 2017, Caraustar was the third largest supplier of folding paperboard boxes to the US market."
Henry also notes that the acquisition helps Greif expand its sustainability credentials. "The packaging industry is seeing increased calls from consumers and brand owners who demand the use of more recycled materials, so having these operations in-house will help."
Furthermore, Henry points out the benefits of adding folding carton capacity in this transaction. "Recent municipal regulations and company initiatives away from single-use plastics also increase demand for folding cartons in the foodservice carryout market, particularly when these items are made using a high level of recycled content. Overall, the market for folding paperboard cartons in the US is expected to be worth over $12 billion by 2022."
Additional analysis of opportunities and trends in the corrugated and paperboard box industry can be found in Freedonia's report Corrugated & Paperboard Boxes in the US. Coverage of other areas in the packaging industry can be found on the Freedonia Group Packaging Portal.