Graphic Packaging Completes Combination with IP's N.A. Consumer Packaging Business

Graphic Packaging Holding Co., Atlanta, Ga., USA, has completed the combination of Graphic Packaging's existing businesses with International Paper's (Memphis, Tenn.) North America Consumer  packaging business. Graphic Packaging owns 79.5% of the combined company and will be the sole manager. IP will own 20.5% of the combined company. Graphic Packaging has assumed $660 million of IP debt and concurrently has amended and restated its senior secured credit agreement. 

There is no change to Graphic Packaging's current board of directors or leadership team. International Paper has a two-year lock-up on the monetization of its ownership interest and cannot purchase GPK shares for a period of five years, subject to limited exceptions.

On a combined basis, Graphic Packaging is now a leading integrated paper-based packaging company with approximately $6 billion of projected revenue and some $1 billion of projected EBITDA post-synergies. Graphic Packaging is one of the largest producers of folding cartons and paper-based foodservice products in the U.S., has strategic folding carton and foodservice converting positions globally, and holds leading market positions in solid bleached sulfate paperboard, coated unbleached kraft paperboard, and coated-recycled paperboard.

"We are excited to close this transformative transaction at the start of the new year, and the timing reflects the significant effort of both Graphic Packaging and International Paper employees," said President and CEO Michael Doss. "We are very enthusiastic about the platform for future growth created by this combination and expect the transaction will significantly increase our mill production and converting scale. The combination meaningfully increases our exposure to the growing foodservice market, provides significant runway to realize synergies, and will 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," Doss continued, adding that "we welcome the talented employees of International Paper into Graphic Packaging, and look forward to delivering significant value from this transaction to our customers, employees, and shareholders in 2018 and beyond."