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Cascades to sell five Canadian plants to U.S. packaging company

Cascades Inc. has reached an agreement for the sale of its North American boxboard manufacturing and converting assets to Graphic Packaging Holding Company for $44.9 million.

Cascades Inc. has reached an agreement for the sale of its North American boxboard manufacturing and converting assets to Graphic Packaging Holding Company for $44.9 million.

The five plants affected by the transaction employ approximately 670 workers.

Cascades’ president and CEO Mario Plourde says the divestment is part of the company’s commitment to focus on sectors in which it excels. “This transaction follows in the wake of a number of other actions taken during the course of the year, with a view to reducing our debt load and focusing our investments in certain core packaging sectors, as well as in the tissue paper and recovery sectors.”

The acquisition is subject to standard closing conditions and regulatory review and is expected to close in the first quarter of 2015.

David Scheible, Graphic Packaging’s chairman, president and CEO, commented: “The acquisition of Cascades’ Norampac paperboard assets enhances our position in North American folding cartons and enables us to extend our customer reach in Canada. The transaction is a continuation of our acquisition strategy to grow integrated folding carton converting volumes in key geographies and end-markets.”

Graphic Packaging, headquartered in Atlanta, Georgia, is a leading provider of packaging solutions for a wide variety of products to food, beverage and other consumer products companies. 

The Cascades boxboard units affected by the transaction are:

– East Angus, Qué., a mill that manufactures recycled coated boxboard for the production of folding cartons. Founded in 1910, it was purchased by Cascades in 1983.

– Jonquière, Qué., a mill that manufactures three-ply coated boxboard from virgin or recycled fibre. Founded in 1963, it was acquired by Cascades in 1984.

– Winnipeg, Man., a plant that manufactures folding cartons. Founded in 1905, it was acquired by Cascades in 2001.

– Mississauga, Ont., a plant that manufactures high-quality graphic packaging. Founded in 1986, it was purchased by Cascades in 1992.

– Cobourg, Ont., a plant that manufactures high-quality flexographic boxboard containers. It was built by Cascades in 1993.

“The investments made in past years in these boxboard manufacturing and converting units have led to an opportunity to create synergies with a player such as Graphic Packaging. By exiting this sector of activity in North America, Cascades and Norampac are turning a page in their history. We sincerely thank our employees for their loyal services, and we wish them all the best in the future,” added Marc-André Dépin, president and CEO of Norampac.

Based in Quebec, Cascades produces, converts and markets packaging and tissue products that are composed mainly of recycled fibres.