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Paper Recycling January 04, 2018 12:30:24 PM

International Paper Concludes Transfer of North American Consumer Packaging Business

Paul Ploumis
ScrapMonster Author
By way of this transaction, Graphic Packaging has merged its existing business with International Paper’s division. The combined company will be solely managed by Graphic Packaging, who has become the majority stakeholder (79.5% ownership).
International Paper Concludes Transfer of North American Consumer Packaging Business

SEATTLE (Scrap Monster): International Paper- the leading producer of renewable fiber-based packaging, pulp and paper products has announced that it has completed transfer of its North American consumer packaging business to Graphic Packaging. The transaction was valued at $1.8 billion.

The two companies had agreed on the deal in October 2017. The deal covers International Paper’s two solid bleached sulfate (SBS) mills located in Augusta, Georgia and Texarkana, Texas along with three converting facilities in the US and one in the UK. The combined production capacity of the two SBS mills is estimated at around 1.2 million tons per annum. The converting facilities have a combined capacity to convert approximately 250,000 tons of SBS paperboard. The transferred business units employ nearly 4,000 workers.

By way of this transaction, Graphic Packaging has merged its existing business with International Paper’s division. The combined company will be solely managed by Graphic Packaging, who has become the majority stakeholder (79.5% ownership). The partnership deal will assume $660 million of International Paper’s debt. Further to the transaction, International Paper currently holds 20.5% ownership interest in the combined entity.

ALSO READ: IP Announces $300 Million Investment at Riverdale Mill

Michael Doss, president and chief executive of Graphic Packaging noted that the company is excited to close the transformative transaction at the start of the New Year. The transaction is expected to lead to significant jump in mill production. Further, it will increase the company’s market share in the growing foodservice market, thereby driving strong financial results, Doss added. The deal is forecast to result in $75 million in synergies.

Atlanta-based Graphic Packaging has been investing big in new acquisitions and modernization of its existing operations. Towards the end of the previous year, the company had announced its decision to invest nearly $136 million towards modernizing its Macon, Georgia paperboard mill, as part of its commitment to improve the mill’s production capabilities.

Meantime, International Paper is due to release its fourth quarter and full-year 2017 earnings on February 1, 2018. The company’s Q3 2017 profits had surged higher by 18%, beating all analyst estimates.

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