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Graphic Packaging Closes Acquisition of International Paper's North America Consumer Packaging Business.

M2 EQUITYBITES-January 4, 2018-Graphic Packaging Closes Acquisition of International Paper's North America Consumer Packaging Business

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4 January 2018 - US-based paper and packaging company International Paper (NYSE: IP) has closed an agreement to contribute its North America Consumer Packaging business to US-based packaging maker Graphic Packaging in a transaction valued at USD 1.8bn, the company said.

IP plans to use USD 660m in cash proceeds from a loan being assumed by Graphic Packaging to pay down existing debt. IP will also receive a 20.5% ownership interest valued at USD 1.14bn in a subsidiary of Graphic Packaging that will hold the assets for the combined business.

The transaction was announced in October.

International Paper's North America Consumer Packaging business is a producer and converter of solid bleached board used in a variety of fiber-based foodservice products such as hot and cold cups, cartons, paper plates, food containers and liquid packaging.

The transaction includes 3,900 Coated Paperboard and Foodservice employees located at 10 locations in the United States and United Kingdom.

Projected 2017 net earnings for the business, the most directly comparable measure calculated in accordance with US generally accepted accounting principles, are USD 35m.

For a discussion of adjusted EBITDA, see our website under Performance / Investors.

No reconciliation of this 2017 projection to the comparable measure under GAAP is included in this release, as we are unable to quantify the line items for such reconciliation without unreasonable effort and we believe such reconciliation would imply a degree of precision that would be misleading.

International Paper is a global producer of renewable fiber-based packaging, pulp and paper products with manufacturing operations in North America, Latin America, Europe, North Africa and Russia.

The company is headquartered in Memphis, Tennessee, and employ approximately 55,000 colleagues located in more than 24 countries. Net sales for 2016 were USD 21bn.

Graphic Packaging Holding Company (NYSE: GPK), headquartered in Atlanta, Georgia, is a provider of paper-based packaging solutions for a range of products to food, beverage and other consumer product companies.

The company operates on a global basis, is one of the largest producers of folding cartons in the United States, and holds leading market positions in coated unbleached kraft paperboard and coated-recycled paperboard.

Citigroup served as financial advisor to International Paper and Evercore Partners rendered a fairness opinion. Debevoise and Plimpton LLP served as International Paper's legal counsel.

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