Nippon Paper will enter the integrated corrugated paperboard manufacturing business in the Oceania region through the acquisition of Orora’s Australasian fibre business

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Nippon Paper has agreed to acquire Orora’s Australasian fibre business for $1.15bn (Credit: Pixabay)

Nippon Paper Group has agreed to acquire Orora’s paperboard fibre-based packaging business in Australia and New Zealand for an enterprise value of A$1.72bn ($1.15bn).

The acquisition of Orora’s Australasian fibre business will help Nippon Paper to enter into the integrated corrugated paperboard manufacturing business in the Oceania region.

Orora’s paperboard fibre-based packaging business in Australia and New Zealand

Orora’s Australasian fibre business includes B9 Paper Mill, fibre converting, speciality packaging, cartons, bags and functional coatings, as well as WRS packaging distribution operations.

The Australasian fibre business is involved in cardboard recycling, as well as the manufacturing of recycled packaging paper and laminated functional paper used for special purpose boxes.

The business serves diversified end markets such as fruit and produce, beverage, meat, dry goods and industrial products. It mainly focuses on consumer products markets, specifically food, dairy and quick service restaurants.

Orora Packaging Solutions has also signed a five-year agreement with Nippon Paper to ensure continuity of supply of paper products from the B9 Paper Mill on arm’s length terms.

Subject to final approval from the authorities and other closing conditions, the deal is expected to be completed during the fiscal year ending March 2020.

Orora’s North American businesses comprises Orora Packaging Solutions (OPS) and Orora Visual (OV).

OPS is one of the major players in the North American fibre packaging distribution segment, while OV is a significant player in the point of purchase/visual displays segment.

Nippon Paper operates five business segments – packaging, household paper products/healthcare, chemicals, energy, and logs and lumber.

In 2016, Nippon Paper Industries acquired Weyerhaeuser’s liquid packaging board business for $285m.

Weyerhaeuser’s mill, situated in Longview of Washington, manufactures liquid packaging rolls, which are later transferred to two extruder machines that apply a polyethylene coating to the product.

The liquid packaging board is used to produce cartons and boxes for milk, juice, tea, shochu, and sake.