International Paper, Graphic Packaging Combine Packaging Businesses
October 24 2017 - 8:49AM
Dow Jones News
By Ezequiel Minaya
International Paper Co. said Tuesday that it had agreed to
combine its North America consumer-packaging business with Graphic
Packaging Holding Co. in a transaction valued at $1.8 billion.
Under the deal, International Paper will receive a 20.5% stake,
valued at $1.14 billion, in the resulting consumer-packing business
and use $660 million in cash proceeds from a loan being assumed by
Graphic Packaging to pay down existing debt.
Shares of International Paper -- the Memphis, Tenn., paper
company -- rose 1.1% to $58.90 in premarket trading, while shares
of Graphic Packaging, an Atlanta producer of cartons and specialty
packaging, climbed 4.1% to $14.85.
International Paper said the deal allows the company to benefit
from Graphic Packaging's consumer-packing business, while helping
IP to remain focused on its core businesses. The transaction is
expected to close early next year.
Earlier this month, International Paper agreed to transfer $1.3
billion in pension liabilities to a unit of Prudential Financial
Inc. in a maneuver used by companies with pension plans to limit
their exposure to volatility in markets and interest rates. The
move was expected to reduce International Paper's $14 billion in
U.S. qualified pension plan liabilities by about 9%.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
October 24, 2017 08:34 ET (12:34 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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