Graphic Packaging Holding Co. will acquire AR Packaging Group, Europe’s second largest producer of fiber-based consumer packaging, for approximately $1.45 billion in cash.
The combination enhances Graphic Packaging’s global scale, innovation capabilities and value proposition for customers throughout Europe and bordering regions. With a broad set of industry-leading packaging solutions, design expertise and expanded geographic reach, the combined company will be uniquely positioned to capture continued organic growth opportunities across existing and new global customers and markets.
The proposed acquisition of AR Packaging is expected to add $1.1 billion in annual sales and $160 million in annual adjusted EBITDA. In addition, the combination is expected to drive total synergies of $40 million over 36 months following close. The deal is expected to be immediately accretive to the company’s earnings per share and cash flow.
“AR Packaging is a leader in the attractive and growing market for sustainable packaging in Europe,” said Michael Doss, Graphic Packaging’s president and CEO, in a statement.
“Acquiring AR Packaging will result in significant value creation opportunities for our customers, our employees and our stockholders as we bring together two leading providers of fiber-based consumer packaging solutions with long histories of innovation and creative packaging design.
“The large, distributed footprint of AR Packaging’s 25 converting facilities across Eastern and Western Europe provides significant scale and cost efficiency benefits strengthening our combined presence and ability to service customers throughout Europe and globally. We are pleased to welcome the AR Packaging team as we work together to further advance our commitment to sustainable packaging solutions for global consumers in support of the move to a more circular economy.”
“I am proud of the progress we have made in establishing a clear strategy and building AR Packaging into a respected provider of packaging solutions,” said AR Packaging President and CEO Harald Schulz. “Graphic Packaging’s shared approach to customer service and deep focus on providing innovative, sustainable solutions closely aligns with how we operate our own business, making them an ideal partner.
“The ability to leverage beneficial value chain integration, from paperboard manufacturing to carton converting, provides increased possibilities to offer sustainably optimized solutions to our customers. Our team looks forward to joining with the Graphic Packaging team to become the premier global provider of sustainable fiber-based packaging solutions.”