Pactiv Evergreen Inc. announced that it has signed a definitive agreement to sell its Pine Bluff, Arkansas, paper mill and Waynesville, North Carolina, extrusion facility to Suzano for $110 million in cash, subject to customary adjustments for closing amounts such as working capital.
Suzano has agreed to offer employment to current employees at Pine Bluff and Waynesville.
Pine Bluff produces liquid packaging board and cupstock used to make fresh beverage cartons, paper cups and other fiber-based food and beverage packaging. Waynesville provides incremental extrusion capacity for the board produced at Pine Bluff.
Pactiv Evergreen and Suzano have also agreed to enter into a long-term supply arrangement at the closing of the transaction pursuant to which Suzano would use Pine Bluff and Waynesville to supply liquid packaging board to Pactiv Evergreen's converting business.
"The sale of Pine Bluff and Waynesville concludes the strategic alternatives review process," said Michael King, President and Chief Executive Officer of Pactiv Evergreen. "This Transaction is consistent with our disciplined focus on value creation, and we expect it to reduce the capital intensity of our business, improve our cash flow profile and further strengthen our balance sheet."
Mr. King added, "We put considerable thought into positioning Pine Bluff and Waynesville for the future and believe this Agreement serves the best interests of our stakeholders and our local communities. I want to thank our Pine Bluff and Waynesville employees for their significant contributions to Pactiv Evergreen and continued dedication to our customers."
According to Suzano, the assets will add approximately 420,000 metric tonnes annually of integrated paperboard to Suzano's production capacity and marks its entrance into the consumer and food service packaging segments in the region.
Fabio Almeida, Executive Vice President of Paper and Packaging at Suzano, said, "This acquisition is in line with our strategy. We are entering the North American market as a competitive producer of paperboard, taking on quality assets that are strategically well-located from an operational and logistical perspective, and opening new opportunities for growth."
The transaction is anticipated to close in the fourth quarter of 2024, subject to the satisfaction of customary closing conditions, including foreign antitrust approval.
TAPPI
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