Graphic Packaging announces initial $250 million acquisition of International Paper’s minority ownership interest in partnership
Graphic Packaging Holding Company announced that International Paper has notified the Company of its intent to begin the process of reducing its ownership interest in Graphic Packaging International Partners, LLC. Per the agreement between the parties, Graphic Packaging will purchase approximately 15.1 million partnership units from International Paper for $250.0 million. As a result, International Paper’s ownership interest in the Partnership will decrease from approximately 21.6% to 18.3%.
The purchase will be funded with a draw on Graphic Packaging’s domestic revolving credit facility. At the end of 2019, Graphic Packaging had availability under the domestic revolving facility in excess of $1.4 billion. According to Graphic Packaging, International Paper has the contractual right to continue to reduce its minority ownership interest in the Partnership every 180 days with the next potential transaction date in July 2020, subject to modification by the parties.
“Our strong cash flow generation and healthy balance sheet provide us the flexibility to purchase the initial $250 million of minority interest from International Paper,” said Michael Doss, President and CEO of Graphic Packaging Holding Company.
“The 2018 transaction with International Paper has successfully created value for our customers and stakeholders while building a leading integrated paperboard packaging platform. We appreciate the confidence International Paper placed in us to build and grow the business. The transaction significantly increased our addressable market and vertical integration opportunities, while accelerating our presence in fiber-based packaging solutions,” Doss concluded.