3rd Jun 2014 10:17
LONDON (Alliance News) - Mondi PLC Monday said it has agreed to acquire the bags and kraft paper business of US-based Graphic Packaging International Inc for USD105 million in cash.
Mondi, a supplier of kraft paper and industrial bags, will fund the acquisition from existing resources. It expects to complete the acquisition towards the end of the second quarter or third quarter of 2014, subject to approval from competition authorities.
Graphic Packaging International is a subsidiary of Graphic Packaging Holding Co. Its bags and kraft paper business saw sales of USD437 million in the year to end-March. Its kraft paper mill in Pine Bluff, Arkansas has a production capacity of 135,000 tonnes per year, and it has nine bags plants across the US.
Mondi said that the combination of the new business with its existing network would help to expand its growing global footprint in the bags market.
"I am confident that the synergies expected from the Acquisition, coupled with Mondi's proven expertise as a leading global kraft paper and industrial bags producer, will ensure that the combined business delivers strongly," said Chief Executive David Hathorn in a statement.
Shares in Mondi were trading down 0.5% at 1,072.00 pence Tuesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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