Packaging Corp. of America (PKG) announced Tuesday that it has entered into a definitive agreement to purchase the containerboard business of Greif, Inc. (GEF) for $1.8 billion in cash.
The Greif containerboard business includes two containerboard mills with approximately 800,000 tons of production capacity and eight sheet feeder and corrugated plants located across the United States.
The business generated approximately $1.2 billion in sales and $212 million of earnings before interest, taxes, depreciation and amortization (EBITDA) for the 12 months ended April 30, 2025.
Synergies are estimated to generate pre-tax benefits of approximately $60 million and are expected to be fully realized within two years after closing.
The synergies are projected to come from improved operational and production capabilities and efficiencies at the mills, increased integration, mill grade optimization and lower transportation costs.
Approximately one half of the benefits are expected by the end of the first year with the remainder being received by the end of the second year.
The transaction is expected to close by the end of Packaging Corp.'s third quarter, subject to certain customary conditions and regulatory approvals. The acquisition is expected to be accretive to earnings immediately.
Packaging Corp. is expected to finance the transaction with $1.5 billion of new debt and cash on hand.
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