Food packaging manufacturer Pactiv Evergreen has entered into a definitive agreement to divest its Pine Bluff, Arkansas, paper mill and Waynesville, North Carolina (both US-based), extrusion facility to Suzano for $110m in cash.  

The deal value is subject to customary adjustments for closing amounts, including working capital. 

Pactiv Evergreen's Pine Bluff site produces liquid packaging boards and cupstock, which are essential for creating beverage cartons and other food and beverage packaging.  

The Waynesville facility complements this by providing additional extrusion capacity for the board produced at Pine Bluff. 

Meanwhile, Suzano has committed to offering employment to the current workforce at both Pine Bluff and Waynesville.  

In addition, the two companies have agreed on a long-term supply arrangement, ensuring that Suzano will continue to supply liquid packaging board to Pactiv Evergreen's converting business post-transaction. 

Pactiv Evergreen president and CEO Michael King said: "The sale of Pine Bluff and Waynesville concludes the strategic alternatives review process. This transaction is consistent with our disciplined focus on value creation, and we expect it to reduce the capital intensity of our business, improve our cash flow profile and further strengthen our balance sheet. 

"We put considerable thought into positioning Pine Bluff and Waynesville for the future and believe this agreement serves the best interests of our stakeholders and our local communities. I want to thank our Pine Bluff and Waynesville employees for their significant contributions to Pactiv Evergreen and continued dedication to our customers." 

Completion of the transaction is subject to customary closing conditions, including foreign antitrust approval, and is expected to close in the fourth quarter (Q4) of 2024.  

Pactiv Evergreen anticipates recording a non-cash impairment charge of approximately $320m to $340m in Q3 2024, based on the estimated cash proceeds from the transaction. 

UBS Investment Bank acted as the financial advisor for Pactiv Evergreen, with Debevoise & Plimpton providing legal counsel during the process. 

In September last year, Pactiv Evergreen partnered with ExxonMobil, a provider of advanced recycling technology, to provide certified circular packaging solutions for the foodservice industry.