Rock-Tenn Acquiring Gulf States Assets

Rock-Tenn Co. announced an agreement to acquire the assets of Gulf States Paper Corp.'s Pulp and Paperboard and Paperboard Packaging business for $540 million. Gulf States operates one paperboard mills in North America and 11 folding carton plants. The business serves primarily food packaging, food service and pharmaceutical and health and beauty markets.

The paperboard mill's annual capacity includes 327,000 tons of bleached paperboard and 91,500 tons of southern bleached softwood kraft pulp.

James Rubright, Rock-Tenn's chairman and CEO, said, "Gulf States' paperboard and packaging business is the best possible strategic combination for our recycled paperboard and folding carton business. Gulf States' very low cost bleached paperboard mill, strong folding carton plants and focus on attractive major food and food service markets are great complements to our existing business. This combination will greatly enhance our ability to serve our North American customers across our extremely diverse product lines. The transaction also provides us many opportunities to reduce our costs and increase our capabilities."

As a result of the acquisition, Rock-Tenn will become the second largest folding carton producer in North America with leading positions in recycled and bleached paperboard.