Both groups have operations in the UK, with AR Packaging acquiring Cambridge-based pharma and food packaging specialist Firstan just four months ago.
US-headquartered Graphic Packaging said the $1.45bn (£1.03bn) cash deal would boost its “global scale, innovation capabilities, and value proposition” for customers throughout Europe and bordering regions.
AR Packaging is currently owned by private equity firm CVC.
Graphic Packaging is pursuing a sustainability-driven business strategy through its Vision 2025 initiative, and president and CEO Michael Doss described AR as “a leader in the attractive and growing market for sustainable packaging in Europe”.
“The large, distributed footprint of AR Packaging’s 25 converting facilities across Eastern and Western Europe provides significant scale and cost efficiency benefits strengthening our combined presence and ability to service customers throughout Europe and globally,” he said.
AR Packaging’s other UK sites are in Highbridge, which makes multi-layer flexible packaging materials, and Rotherham which makes paper cups, lids and tubes.
President and CEO, Harald Schulz said Graphic Packaging was “an ideal partner” and thanked CVC for its support.
“The ability to leverage beneficial value chain integration, from paperboard manufacturing to carton converting, provides increased possibilities to offer sustainably optimised solutions to our customers.”
He said the businesses wanted to become the “premier global provider” of sustainable fibre-based packaging solutions.
The acquisition is expected to increase Graphic Packaging’s sales by $1.1bn and add $160m in adjusted EBITDA. Cost saving synergies totalling $40m are expected over a three-year period.
Graphic Packaging had sales of $6.56bn last year. The group acquired Contego Packaging’s UK and European food and beverage carton business in 2013, and followed that with the £100m purchase of Benson Group seven years ago.
Its UK sites are in Newcastle upon Tyne, Gateshead, Leeds, Winsford, Leicester and Bristol. It also has an operation in Portlaoise in Ireland.
The deal is subject to customary closing conditions.
