03:38 PM EDT, 07/01/2025 (MT Newswires) -- Packaging Corp. of America ( PKG ) has agreed to buy the containerboard business of industrial packaging products maker Greif ( GEF ) for $1.8 billion in cash, sending shares of both companies higher on Tuesday.

Packaging Corp. of America ( PKG ) said that the transaction, which requires regulatory approvals, is anticipated to complete by the end of the third quarter. Greif ( GEF ) separately said that deal completion was due by the end of its fiscal 2025.

Greif's ( GEF ) containerboard business includes two mills with roughly 800,000 tons of production capacity and eight sheet feeder and corrugated plants in the US, according to Packaging Corp. of America ( PKG ). The business generated about $1.2 billion in sales and $212 million of earnings before interest, taxes, depreciation and amortization for the 12 months ended April 30.

"This acquisition furthers (Packaging Corp. of America's ( PKG )) profitable growth strategy," Chief Executive Mark Kowlzan said. The mills complement its system and provide containerboard to support the company's corrugated products growth, he said.

Shares of the purchaser were up 8% in late afternoon trade, while Greif ( GEF ) jumped 6.4%.

Packaging Corp. of America ( PKG ) expects the acquisition to be immediately accretive to earnings and drive synergies of about $60 million within two years after closing.

Greif ( GEF ) said the deal allows it to deliver "more durable earnings," and that it will use the proceeds for further debt repayment. The company previously announced a planned divestiture of its timberland business.

"The sale of our containerboard business is fully aligned with our build to last strategy and unlocks immediate value for our shareholders," said Ole Rosgaard, CEO of Greif ( GEF ). "It represents a pivotal step in our work to sharpen our portfolio, enhance our capital efficiency, and advance our growth priorities."

Price: 203.17, Change: +14.72, Percent Change: +7.81