The divested business is engaged in the production of folding cartons for consumer packaged goods firms

Grief

Graphic Packaging has agreed to acquire Greif’s Consumer Packaging Group (Credit: Adam Radosavljevic from Pixabay)

Graphic Packaging Holding, via its US operating firm Graphic Packaging International,  has agreed to acquire the Consumer Packaging Group business from Greif in a deal valued at around $85m.

As part of the agreement, Graphic Packaging will purchase Greif’s seven converting across the US facilities that are involved in the production of folding cartons for consumer packaged goods businesses.

Greif’s divested converting facilities generate over $200m in annual revenue

The seven converting facilities are said to generate more than $200m in annual revenue.

Graphic Packaging Holding president and CEO Mike Doss said: “We are excited to announce the acquisition of the Consumer Packaging Group business from Greif, Inc.

“The transaction further diversifies our end-markets and enhances our service capabilities to growing mid-sized consumer goods and foodservice customers.”

Subject to standard closing conditions, the deal is expected to be completed in the first quarter of 2020.

Graphic Packaging has evaluated the impact of recently announced RISI Pulp and Paper market price changes, as well as current expectations for commodity input cost inflation.

On the transaction, Goldman Sachs acted as exclusive financial advisor to Greif while Allen & Overy acted as exclusive legal advisor.

Greif president and CEO Pete Watson said: “The sale of CPG allows us to de-lever our balance sheet and optimize capital allocation plans.

“By divesting these assets, we can refocus our business on our core industrial franchise and our stated strategic growth priorities in Intermediate Bulk Container production and reconditioning and containerboard integration.”

Last month, Graphic Packaging International agreed to acquire Omaha packaging plant from Quad/Graphics for around $40m. Quad has divested Omaha packaging plant to concentrate more on higher-value packaging solutions.

Graphic Packaging provides paper-based packaging solutions for different products while Greif offers industrial packaging products and services.