Graphic Packaging Holding Company has made its second acquisition of International Paper’s minority partnership interest for $250 million, taking its ownership stake to 85.5%.
The deal marks International Paper’s continued intentions to monetise its ownership interest in Graphic Packaging International Partners, their partnership company.
In 2017, International Paper’s North American consumer packaging business and Graphic Packaging formed a $6 billion paper-based packaging merger. At its establishment, Graphic Packaging owned 79.5% of the partnership and was the sole operator, while International Paper held a 20.5% stake equivalent to $1.14 billion.
The acquisition follows International Paper’s move earlier this year, as it began the process of reducing its ownership interest in the merger by selling an initial $250 million stake to Graphic Packaging who had witnessed a “strong cash flow generation and healthy balance sheet”.
It was announced that International Paper had the contractual rights to continue to reduce its minority ownership interest in the partnership every 180 days.
As part of the new deal, Graphic Packaging will purchase approximately 17.4 million partnership units from International Paper for $250 million, increasing its ownership interest in the partnership from approximately 81.1% to 85.5%.
The purchase will be funded with cash on hand and a draw on the domestic revolving credit facility.
Earlier this year, Graphic Packaging also agreed to acquire the consumer packaging group business of Greif for approximately $85 million.
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