Greif Divests Containerboard Business For $1.8 Billion To Slash Debt
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jul 01 2025
0mins
Source: Benzinga
Greif Inc. Divestiture: Greif Inc. has agreed to sell its Containerboard business to Packaging Corporation of America for $1.8 billion, which includes two mills and several plants, with the deal expected to close by the end of fiscal 2025.
Financial Implications: The sale is projected to improve Greif's financial position by reducing leverage and generating significant annual savings, while PCA plans to finance the acquisition primarily through new debt.
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Analyst Views on PKG
Wall Street analysts forecast PKG stock price to rise
8 Analyst Rating
6 Buy
2 Hold
0 Sell
Strong Buy
Current: 213.450
Low
226.00
Averages
242.86
High
273.00
Current: 213.450
Low
226.00
Averages
242.86
High
273.00
About PKG
Packaging Corporation of America is a producer of containerboard products and a producer of uncoated freesheet (UFS) paper in North America. The Company operates eight mills and 86 corrugated products plants and related facilities. Its segments include Packaging, Paper and Corporate and Other. Its containerboard mills produce linerboard and corrugating medium, which are papers primarily used in the production of corrugated products. Its corrugated products manufacturing plants produce a variety of corrugated packaging products. In addition, it also produces packaging for meat, fresh fruit, and vegetables, processed food, beverages, and other industrial and consumer products. It manufactures and sells papers, including both commodity and specialty papers, which may have custom or specialized features, such as colors, coatings, high brightness, and recycled content. Its papers consist of communication papers, including cut-size office papers, and printing and converting papers.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Positive Economic Data: Despite the market downturn, the U.S. consumer confidence index unexpectedly rose to 92.8, surpassing expectations, indicating economic resilience that could provide support for the market.
- Surging Oil Prices: WTI crude oil prices jumped over 3% to a two-week high amid escalating tensions between the U.S. and Iran in the Strait of Hormuz, potentially exacerbating the global energy crisis and pushing inflation expectations higher.
- Fed Policy Expectations: The market anticipates that the Federal Reserve will keep interest rates unchanged at the upcoming meeting, focusing on oil prices and inflation dynamics, reflecting a cautious outlook on the economic landscape.
See More
Packaging Corporation of America Q1 Performance Analysis
- Revenue Growth: Packaging Corporation reported Q1 revenue of $2.37 billion, reflecting a 10.6% year-on-year increase, although it fell short of the $2.42 billion analyst expectations, indicating resilience and growth potential in the market.
- Earnings Performance: The GAAP EPS was $1.91, missing analyst estimates of $2.11 by 9.4%, highlighting challenges from cost pressures and competitive market conditions.
- Operational Efficiency Gains: The company achieved strong shipment growth in its legacy packaging segment, with daily corrugated shipments reaching record levels, demonstrating adaptability to customer demand and strengthening its market position.
- Future Outlook: Management anticipates that upcoming price increases will drive future revenue growth, despite ongoing cost pressures in the near term, emphasizing the importance of optimizing production networks and integrating Greif assets.
See More
Packaging Corporation of America Q1 2026 Earnings Highlights
- Net Income Exceeds Expectations: Packaging Corporation reported a first-quarter net income of $171 million, or $1.91 per share, with adjusted net income of $215 million, or $2.40 per share, surpassing the guidance of $2.20, reflecting strong operational and commercial performance.
- Full Capacity Operations: The company operated at full capacity during the quarter, successfully completing the Wallula mill reconfiguration, which reduced costs for fiber, power, and labor, and anticipates second-quarter demand to mirror the first, further solidifying its market position.
- Strong Cash Flow: Operating cash flow for the first quarter was $329 million, resulting in a free cash flow of $164 million after $165 million in capital expenditures, demonstrating effective capital management and investment returns.
- Optimistic Future Outlook: Management expects second-quarter earnings of $2.33 per share, with anticipated price increases for containerboard and corrugated products starting in May, and significant benefits expected in Q3, showcasing confidence in future growth prospects.
See More
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- Record Shipments: The company achieved a record daily shipment rate in its legacy corrugated operations, with daily shipments rising 2.8% year-over-year, and a total increase of 21.8% when including the acquired Greif business, reflecting robust market demand and improved product mix.
- Improved Profitability: Adjusted EBITDA rose to $476.5 million from $418.3 million a year earlier, demonstrating effective strategies in managing freight and raw material cost pressures, despite reported earnings being impacted by restructuring and acquisition costs.
- Positive Q2 Outlook: The company forecasts Q2 earnings of $2.33 per share, citing continued strong packaging demand and seasonal volume improvements, indicating a positive outlook for future market performance.
See More
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- Earnings Beat: Packaging Corporation of America reported a Q1 non-GAAP EPS of $2.40, exceeding expectations by $0.27, indicating significant improvements in cost control and operational efficiency, which bolsters investor confidence.
- Revenue Growth: The company achieved revenues of $2.38 billion in Q1, reflecting an 11.2% year-over-year increase, although it fell short of market expectations by $40 million, highlighting challenges from intensified industry competition and market demand fluctuations.
- Industry Outlook: During the Bank of America 2026 Global Agriculture and Materials Conference, the company showcased its strategic direction, emphasizing continued price increases to address rising raw material costs, which is expected to positively impact the packaging industry.
- Market Reaction: Analysts noted that price hikes by Cascades serve as a positive signal for the packaging sector, potentially enhancing profitability across the industry and further solidifying Packaging Corporation's market position.
See More
Packaging Corporation to Announce Q1 Earnings on April 22
- Earnings Announcement: Packaging Corporation is set to release its Q1 2023 earnings on April 22 after market close, with consensus EPS estimated at $2.13, reflecting a 7.8% year-over-year decline, while revenue is projected at $2.42 billion, indicating a 13.1% year-over-year increase.
- Performance Analysis: Over the past two years, PKG has surpassed EPS and revenue estimates 63% of the time, demonstrating a degree of stability amid market fluctuations, although recent EPS estimates have seen no upward revisions and six downward adjustments.
- Revenue Estimate Changes: In the last three months, revenue estimates have experienced one upward revision and four downward revisions, indicating a cautious market sentiment regarding PKG's future performance, which may affect investor confidence.
- Industry Outlook: As demand strengthens into 2026, Packaging Corporation projects a Q1 EPS of $2.20, suggesting that the company remains optimistic about future market demand while targeting full-capacity mill operations.
See More
