Global packaging firm Sonoco has agreed to acquire the joint venture of Conitex Sonoco in a deal worth approximately $133m.
As per the deal, Sonoco will purchase the remaining 70% stake in Conitex Sonoco, which is a manufacture of paper-based cones and tubes used in the textile industry.
The joint venture was formed between Spain-based provider of paperboard and paper-based packaging products Texpack and Sonoco’s former North America textile cone business.
The deal, which is planned to be completed in the third quarter of 2018, is subject to normal international regulatory reviews.
Last year, the joint venture had approximately $245m of total sales and produced more than 300,000 tons of uncoated recycled paperboard. The firm also produces adhesives, flexible intermediate bulk containers and corrugated pallets.
Sonoco president and CEO Rob Tiede said: “The Conitex Sonoco relationship has been very successful over the past 20 years, and we see even further opportunity to grow Sonoco’s existing global paper-based tube and core business through this combination, especially in faster-growing emerging markets in Asia where we will be substantially increasing our manufacturing presence while more than doubling our current annual sales in the region.”
“We welcome Conitex Sonoco’s nearly 1,250 employees and are excited by the prospects for further building strong relationships with our combined customers in Asia, the Americas and Europe by offering innovative packaging solutions in paperboard, textile carriers and other value-added products.”
With operations in 10 countries, the joint venture has 13 manufacturing plants including four paper mills and seven cone and tube converting operations as well as two other production facilities.
Sonoco expects the acquisition of Conitex Sonoco to be modestly accretive to its earnings in 2018.
Upon completion of the transaction, Conitex Sonoco’s financial results will be reported within Sonoco’s Paper/Industrial Converted Products segment.
Employing 21,000 people in 33 countries, Sonoco is engaged n providing consumer packaging, industrial products, protective packaging, and displays and packaging supply chain services.