Graphic Packaging finalizes merger of International Paper's North America consumer packaging business

Graphic Packaging Holding Co. has completed the combination of Atlanta-based Graphic Packaging's existing businesses with Memphis, Tennesse-based International Paper's consumer packaging business in North America. Graphic Packaging owns 79.5 percent of the combined company and will be the sole manager, while International Paper owns 20.5 percent of the combined company. Graphic Packaging also has assumed $660 million of International Paper debt and concurrently has amended and restated its senior secured credit agreement.

Graphic Packaging says it has made no changes to its board of directors or leadership team following the merger.

International Paper has a two-year lock-up on the monetization of its ownership interest and cannot purchase Graphic Packaging 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 approximately $1 billion of projected EBITDA (earnings before interest, taxes, depreciation and amortization). Graphic Packaging is one of the largest producers of folding cartons and paper-based foodservice products in the United States, 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," says Graphic Packaging Holding Co. 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."

He adds, "The $75 million in synergies is compelling and will be driven by cost reductions, increased paperboard integration and procurement and mill efficiencies."