PCA agrees deal to acquire Greif Containerboard for $1.8 bln in third major containerboard M&A deal

Packaging Corp of America (PCA) has signed a definitive agreement to acquire Greif’s US containerboard business for $1.8 billion. The deal will be the third major consolidation in the North American and Europe containerboard markets in the past year.

“This acquisition furthers PCA’s profitable growth strategy,” PCA chief executive officer Mark Kowlzan said in a press release on Tuesday July 1. “The mills nicely complement PCA’s system and will provide containerboard to support PCA’s continued corrugated products growth.”

PCA said on July 1 that it expected the transaction to close by the end of September.

The Greif Containerboard mills have about 800,000 short tons per year of capacity. The mills are in Massillon, in the state of Ohio, and Riverville between Charlottesville and Lynchburg, Virginia.

“We expect to achieve significant synergies with minimal capital investment through our operational expertise, and will identify even more opportunities within the combined system for future high-return investments to grow with our corrugated and sheet feeder customers,” Kowlzan added.

Market contacts told Fastmarkets’ PPI Pulp & Paper Week in the past two months that they expected PCA to acquire Greif Containerboard specifically for Greif’s eight packaging converting sheet plants. They said that PCA needed more sheet plant capacity for its corrugated converting business.

PCA is the third-largest producer by containerboard capacity in North America, and the most profitable among the publicly traded companies. It reported a 20.77% margin in packaging in the first quarter of 2025.

PCA and Pratt Industries are the two largest integrated containerboard-to-corrugated-box companies in North America.

After North American linerboard prices declined by $110 per ton on the domestic market, because of supply chain destocking that began in mid-2022 and lasted through to the end of 2023, linerboard prices in North America increased by $120 per ton, even as actual US box demand declined yet as inflationary costs mounted.

At the same time, during this rebound, Smurfit Kappa acquired WestRock for $11 billion. Additionally, International Paper acquired DS Smith for $7.2 billion. Now PCA is trying to acquire Greif Containerboard for $1.8 billion. Assuming that the PCA/Greif transaction is completed, these three deals will have a combined cost of $20 billion. This would represent the most paid in a year in containerboard M&A activity.

The US corrugated box business generates about $40-42 billion per year, based on Fibre Box Association figures.

Including Greif, PCA would remain the third-largest containerboard producer in North America. It sits behind IP and Smurfit Westrock, according to Fastmarkets capacity figures. IP’s containerboard capacity is about 29% and Smurfit Westrock’s 20%. With the acquisition, PCA would nudge up by 2% to an almost 16% share. The combined share of the largest three companies would be about 65% of the total that exceeds 40 million tons per year of regional containerboard capacity in the US.

PCA has continued to upgrade its US corrugated box plant system in the past five or six years.

Over three years it has phased-in additional kraft linerboard and corrugating medium capacity of about 800,000 tpy. The company did this by converting two uncoated freesheet paper machines in Jackson, Alabama.

Greif became the 100% owner of corrugated sheet feeder CorrChoice in 2003, which was formed on November 1, 1998. CorrChoice operates eight corrugated sheet feeder plants, which supply converting operations in the eastern US.

CorrChoice started up new plants in 2020 in Palmyra, Pennsylvania, and in 2024 in Dallas, Texas. The Palmyra plant runs a 110in corrugator in a 350,000 square foot building with litho lamination capability. The Dallas plant makes triple wall sheets and jumbo boxes.

Other CorrChoice plants include ones in Massillon, Ohio, where Greif operates a containerboard mill, in Cincinnati, Ohio, and Concord, North Carolina.

The Greif containerboard business includes the two containerboard mills and the eight sheet feeder and corrugated plants in the US. The business generated about $1.2 billion in sales and $212 million of earnings before interest, taxes, depreciation and amortization (EBITDA) for the 12 months ended April 30, 2025 (the LTM period), PCA said in its July 1 release.

“Synergies are estimated to generate pre-tax benefits of approximately $60 million and are expected to be fully realized within two years after closing,” PCA said.

“The synergies are projected to come from improved operational and production capabilities and efficiencies at the mills, increased integration, mill grade optimization and lower transportation costs,” it added. “Approximately half of the benefits are expected by the end of the first year, with the remainder being received by the end of the second year.”

The purchase price represents a multiple of 8.5X LTM EBITDA and, with $60 million in benefits from synergies, the purchase price represents a multiple of 6.6X LTM EBITDA, PCA said.

PCA is to finance the acquisition with $1.5 billion of new debt and cash on hand. PCA’s pro forma leverage ratio (net debt to EBITDA) will be approximately 1.7X after completion of the transaction.

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