Packaging Corporation of America announced today that it has entered into a definitive agreement to purchase the containerboard business of Greif, Inc. The transaction was closed for $1.8 billion in cash. The transaction is expected to close by the end of PCA’s third quarter, subject to the satisfaction of certain conditions and regulatory approvals.

PCA is the third-largest producer of paperboard products and a leading producer of uncoated free-sheet paper in North America. PCA operates eight mills and 86 corrugated manufacturing plants and related facilities.

The purchase price represents a multiple of 8.5X EBITDA: with $60 million of synergy benefits, the purchase price represents a multiple of 6.6X EBITDA. The acquisition is expected to be "immediately positive to earnings," the statement said. PCA is expected to finance the transaction 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 following completion of the transaction.

Greif’s containerboard operations include two containerboard plants with a production capacity of approximately 800,000 tons and eight sheet and corrugated feed plants located throughout the United States. The business generated approximately $1.2 billion in sales and $212 million in earnings before interest, taxes, depreciation and amortization (EBITDA) for the 12 months ended April 30, 2025.

According to the official press release, the synergies between the two giants "will generate pre-tax benefits of approximately $60 million": it is expected, the note underlines, "that they will be fully realized within two years from the closing of the transaction". The synergies should come from the improvement of operational and production capabilities and plant efficiency, from greater integration, from the optimization of processing grades and from the reduction of transportation costs. About half of the benefits are expected by the end of the first year, while the remainder will be achieved by the end of the second year.

"This acquisition advances PCA's profitable growth strategy," said Mark Kowlzan , PCA's chief executive officer. "The paper mills complement PCA's system and will provide paperboard to support PCA's continued growth in corrugated products. We expect to realize significant synergies with minimal capital investment through our operating expertise and will identify even more opportunities within the combined system for future high-return investments to grow with our corrugated and sheet-feed customers. We will continue to generate significant cash flow and value for our shareholders."

Added PCA Chairman Tom Hassfurther : "We have great respect for Greif and are very pleased to have reached an agreement to acquire this business. The Greif people have developed deep and lasting relationships with their customers, whom we look forward to serving with Greif's well-capitalized facilities. It is a very strong culture of safety, innovation, growth and dedication to customer needs. We will apply the combined organization's sales, customer service and operations expertise to better serve our corrugated and sheetfed customers and achieve further growth and profitability."