PCA Completes $1.8B Acquisition of Greif’s Containerboard Business

Greif completed the divestiture of its containerboard business to Packaging Corporation of America for $1.8 billion in cash, the companies announced after markets closed Tuesday afternoon. The transaction itself closed on Sunday, according to a securities filing.

 

“The closing of this sale marks an important step forward for Greif,” Greif President and CEO Ole Rosgaard said in a statement. “This transaction unlocks immediate value for our shareholders and allows Greif to deliver stronger and more consistent earnings power, enhances our capital efficiency, and accelerates debt reduction.”

 

The company plans to use proceeds from the sale to pay down approximately $1.4 billion in debt, according to another securities filing.

 

After the deal close, Greif altered its 2025 full-year guidance to $507 million to $517 million of adjusted earnings before interest, taxes, depreciation and amortization for fiscal year 2025, which ends Sept. 30. The company also altered its adjusted free cash flow guidance for 2025 by about $15 million, to a range of $290 million to $300 million, inclusive of discontinued operations.

 

Greif previously reported results for the containerboard business in its paper segment, but it now will classify that as a “discontinued operation” beginning in the third quarter of 2025. The company announced in a 2024 securities filing that in 2025 it would change its fiscal year end from Oct. 31 to Sept. 30, resulting in an 11-month fiscal year for 2025.

 

PCA anticipated it will fully realize pre-tax benefits of approximately $60 million within two years after the deal closes.

 

The companies announced on July 1 that they had entered an agreement the previous day for a $1.8 billion cash transaction. They initially projected the deal would close by the end of the third quarter of the calendar year. Rosgaard announced on the company’s earnings call last week that the closing would occur by the end of August.

 

The divestiture supports Greif’s recently launched three-year, $100 million cost-cutting plan and its work to refocus its priority markets.

 

“Our strategy has been, and is, that we want to have a No. 1 or No. 2 position in whatever we choose to do,” Rosgaard said on a July 1 call to discuss the divestiture. “We are not there with containerboard. We aren’t even close. And we are unwilling to make the significant investments that that would take.”

 

Source: Packaging Dive