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Graphic Packaging to Merge IP’S Packaging into $6 billion Giant

International Paper’s packaging operations will merge with Graphic Packaging International (GPI) in a transaction valued at US$1.8 billion. As a result IP will receive a 20.5 percent ownership interest in the company, which will be one of the largest folding carton and packaging operations in North America, generating approximately $6 billion in revenues annually.

The transaction, expected to close in early 2018, is to be structured as a new partnership comprised of Graphic Packaging’s existing businesses and International Paper Company’s North America Consumer Packaging business. Graphic Packaging Holding Company (GPK) will own 79.5 percent of the partnership and will be the sole operator. There will be no change to GPK’s current Board of Directors or leadership team.

The new partnership will assume US$660 million of International Paper debt. It will expand existing paper-based packaging for GPK and build new platforms for growth in SBS foodservice markets and folding-carton converting.

“After evaluating a range of strategic options, we believe this transaction represents excellent value for IP’s shareholders,” said International Paper Chairman and CEO Mark Sutton. “Investing in Graphic Packaging gives IP the opportunity to benefit from a much stronger value-creation consumer packaging platform, while allowing us to remain focused on growing value in our core businesses.”

International Paper’s North America Consumer Packaging business produces and converts solid bleached board used in a variety of fiber-based foodservice products such as hot and cold cups, cartons, paper plates, food containers and liquid packaging. The transaction includes 3,900 coated paperboard and foodservice employees located at 10 locations in the United States and United Kingdom.

GPK, headquartered in Atlanta, Georgia, is global company with two Canadian operations in Cobourg and Mississauga, Ontario.