Graphic Packaging Holding Company to acquire AR Packaging

Packaging Solutions

Graphic Packaging Holding Company and CVC Capital Partners Fund VI have announced a definitive agreement under which Graphic Packaging will acquire AR Packaging Group AB, Europe’s second largest producer of fibre based consumer packaging, for approximately $1.45 billion in cash, subject to customary adjustments.

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 packaging solutions, design expertise, and expanded geographic reach, the combined company will be 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.

Michael Doss, Graphic Packaging’s president and CEO, said: ‘AR Packaging is a leader in the attractive and growing market for sustainable packaging in Europe. 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 fibre 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.’

Stephen Scherger, Graphic Packaging’s executive vice president and CFO, added: ‘The acquisition of AR Packaging expands our opportunities to serve and grow in markets around the world with our sustainable packaging solutions. The combination, together with our previously announced acquisition of Americraft Carton, supports our growth goals and positions Graphic Packaging to consistently deliver organic sales growth at the high end of our 100 to 200 basis points goal as outlined in Vision 2025. Notably, the lean operating models executed by both organisations, coupled with our complementary market segments, provide compelling financial benefits.’

AR Packaging’s president and CEO, Harald Schulz, said: ‘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. I want to thank CVC for its support in those efforts over the last five years. 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 it an ideal partner. The ability to leverage beneficial value chain integration, from paperboard manufacturing to carton converting, provides increased possibilities to offer sustainably optimised solutions to our customers. Our team looks forward to joining with the Graphic Packaging team to become the premier global provider of sustainable fibre based packaging solutions.’

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