Sonoco Products Company ( SON ) shares are surging premarket on Thursday. On Wednesday, the company entered into an agreement to sell its Thermoformed and Flexibles Packaging business to TOPPAN Holdings Inc. for around $1.8 billion on a cash-free and debt-free basis.

The deal is at par with previously announced stratgeic review of Thermoformed & Flexible Packaging business, which is a part of the Sonoco’s Consumer Packaging segment.

The transaction is expected to close in the first half of 2025, subject to customary closing conditions, including regulatory approvals.

“The decision to sell our TFP business accelerates our portfolio simplification strategy, streamlines our organizational structure, and enables more focused capital investments in our remaining industrial paper and consumer packaging businesses,” said Howard Coker, Sonoco’s president and CEO.

Net proceeds from the transaction are expected to be used to repay existing debt.

As of Sept. 29, 2024, Sonoco had total debt of $4.8 billion.

In December, Sonoco closed the acquisition of Eviosys, European food cans, ends and closures manufacturer, from KPS Capital Partners, LP for $3.9 billion.

Investors can gain exposure to the stock via Northern Lights Fund Trust IV Monarch Dividend Plus Index ETF .

SON Price Action: SON shares are up 3.95% at $51 premarket at the last check Thursday.

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