Graphic Packaging pushes into Europe with second acquisition in a month
One of the firm’s subsidiaries has acquired Å&R Carton’s Beer and Beverage packaging business for €19m and will assume €7m in other net liabilities.
Graphic Packaging said the move would complement the acquisition of Contego Cartons to form one of Europe's largest folding carton packaging businesses.
The US company operates in industries including beverage, confectionery and bakery.
European stronghold
The combination of Graphic Packaging, Contego and Å&R will create a $500m business in Europe.
Å&R Beer and Beverage packaging business includes two manufacturing facilities that convert 30,000 tons of paperboard annually in Sneek, The Netherlands and Bremen, Germany.
The firm will continue to operate in the confectionery, consumer goods, food service, tobacco and performance packaging segments.
The combined business is expected to generate $16-$18m of synergies over the next two years and be accretive to earnings in the first full year after integration.
Extend customer reach
David Scheible, Graphic Packaging's president and chief executive officer, said the acquisition will enhance their position in Europe and extend customer reach in the region.
"Å&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 Å&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."
Competition concerns
The acquisition is subject to standard closing requirements and is expected to be completed in late December.
Graphic Packaging’s deal with Contego is currently under UK Office of Fair Trading scrutiny due to competition concerns with an invitation to comment closing tomorrow.
“We are very pleased, especially for our customers and employees, to have found a new owner for our beer & beverage activities who will secure and develop this business into the future,” said Harald Schulz, CEO of Å&R Carton.
“For Å&R Carton, diversification will reduce as a result of the divestment, which allows us to concentrate on our five remaining strategic market segments.”
