Graphic Packaging grows European folding carton operation with A&R acquisition

- Combination of Graphic Packaging, Contego and A&R will create a US$500 million business in Europe

 

- Both acquisitions provide opportunities for Graphic Packaging to further integrate its SUS paperboard

 

Graphic Packaging, a US-based provider of packaging solutions to food, beverage and other consumer products companies, has agreed a deal to buy the beer and beverage business unit of A&R Carton, extending its European footprint following the recent acquisition of Contego Cartons.

 

A&R Carton is divesting its production plants in Sneek, The Netherlands and Bremen, Germany as part of the sale of its beer and beverage operation.

 

Under the terms of the transaction, Graphic Packaging will pay approximately €19 million in cash and assume approximately €7 million in other net liabilities.

 

The two A&R beer and beverage packaging manufacturing facilities convert approximately 30,000 tons of paperboard annually.

 

The acquisition is subject to standard closing requirements and is expected to close in late December. 

 

Graphic Packaging, headquartered in Marietta, Georgia, is a leading provider of packaging solutions for a wide variety of products to food, beverage and other consumer products companies. 

 

A&R Carton is a leading packaging company with 1,650 employees and 13 production sites in eight European countries. Markets it serves include FMCG, tobacco, confectionery, food service, performance packaging and, until the deal with Graphic Packaging, beer and beverage.

 

Its beer and beverage business had operated on a stand-alone basis with a product range primarily consisting of solid board multi-packs for brewery products.

 

Graphic Packaging said the acquisition of A&R Carton's beer and beverage packaging business expands the company’s position in the European beverage packaging market and when combined with the recent acquisition of Contego Cartons creates one of Europe’s largest folding carton packaging businesses with a value of US$500 million.

 

The combined businesses are expected to generate US$16-18 million of synergies over the next two years and be accretive to earnings in the first full year after integration.

 

In addition, the acquisition of A&R and Contego provides state-of-the-art web and sheet-fed converting assets creating a manufacturing platform in Europe similar to Graphic Packaging's US operations.

 

Both acquisitions provide opportunities for Graphic Packaging to further integrate its SUS paperboard.

 

SUS products are made from pine trees, a natural, renewable resource, and are third-party certified to meet Sustainable Forestry Initiative (SFI) requirements.

 

David Scheible, Graphic Packaging's president and chief executive officer, said: ‘The acquisition of A&R Carton's beer and beverage packaging business enhances our position in the European beverage packaging market and enables us to extend our customer reach in the region.

 

‘A&R has a solid reputation as an innovative beverage packaging supplier and the combination allows us to better serve our global beverage customers with a broader base of new products and services. 

 

‘Similar to our strategy in the US, we are committed to growing our European business around food and beverage end markets, and optimizing our supply chain footprint around our customers' needs. 

 

‘The A&R acquisition, combined with last week's announced acquisition of Contego Cartons, gives Graphic Packaging a significant position in the European folding carton market and widens the company's global footprint.’

 

Harald Schulz, chief executive officer of A&R Carton, said: ‘We are very pleased, especially for our customers and employees, to have found a new owner for our beer and beverage activities who will secure and develop this business into the future.

 

‘For A&R Carton, diversification will reduce as a result of the divestment, which allows us to concentrate on our five remaining strategic market segments.’

 

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