Mondi to acquire American bags and kraft paper business

3rd Jun 2014 13:44

FTSE 100 packaging and paper company Mondi Group is set to acquire Graphic Packaging International's US bags and kraft paper business for $105m.The business's production base comprises an integrated kraft paper mill located in Arkansas, with production capacity of 135,000 tonnes a year, and nine bags plants across the States. In the year ended March 31st 2014, it generated unaudited pro forma sales of approximately $437m.The acquisition will be funded from existing resources and is expected to complete towards the end of the second quarter or early in the third quarter of this year. David Hathorn, the Chief Executive of Mondi, said: "The combination of the Business with Mondi's existing network will create a leading bags player in North America and expand the group's growing global footprint in this market. We look forward to offering innovative solutions to our enlarged customer base."I am confident that the synergies expected from the acquisition, coupled with Mondi's proven expertise as a leading global kraft paper and industrial bags producer, will ensure that the combined business delivers strongly."The acquisition is being made on a debt- and cash-free basis. The share price had fallen 0.56% to 1,071p by 14:11 on Tuesday.NR