US packaging group Graphic Packaging Holding Company will acquire the North American consumer packaging business from International Paper (IP) for $1.8bn.

Graphic Packaging said that the merger of the IP division with its own mills would give rise to an integrated packaging company with potential sales of $6bn. IP would retain 20.5% worth $1.14bn in the jointly-owned company, reports added. However, Graphic Packaging with a majority stake of 79.5% will be the sole operator of the company. The partnership will assume IP's debts amounting to $660m.

The merger will not include IP's mills in Kwidzyn, Poland and Svetogorsk, Russia, which are part of the international business of IP's consumer packaging segment. IP's food service plants in China and Columbia are also excluded from the transaction.

Graphic Packaging expects to generate synergies worth $75m in the three years following the merger from cost reductions, greater board integration and higher efficiency in procurement and plant management.

The management of the two companies have reportedly approved the transaction but it is subject to the usual regulatory approval and issue of government permits. The transaction is expected to be completed at the beginning of 2018.

 

Source:euwid-paper.com

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