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Graphic Packaging will create a $6 billion paper-based packaging company by forming a new partnership  with International Paper.  Graphic Packaging Holding Company will own 79.5 percent of the partnership and will be the sole operator. International Paper will own 20.5 percent of the partnership, equivalent to a $1.14 billion value. The partnership will assume $660 million of International Paper debt.
“We are excited about the platform for future growth created by this combination,” said President and CEO Michael Doss. “We expect the transaction will significantly increase our mill production and converting scale, meaningfully increase our exposure to the growing foodservice market, provide significant runway to realize synergies, and drive strong financial results.”
“The $75 million in synergies is compelling and will be driven by cost reductions, increased paperboard integration, and procurement and mill efficiencies.”
International Paper’s North America Consumer Packaging business is a $1.6 billion revenue production of solid bleached sulfate (SBS) paperboard and paper-based foodservice products globally. The business includes two SBS mills located in Texas with annual production capacity of 1.2 million tons of SBS, three converting facilities with the capacity to convert 250,000 tons of SBS paperboard into over 24 billion units of paper-based cups and cylindrical containers. The business is projected to generate Adjusted EBITDA of $210 million in 2017.