Mayr-Melnhof Karton reported a major divestiture that sent its stock significantly higher on Tuesday, as the Austrian paper and packaging group said it will sell a 70% stake in its packaging business to U.S. private equity firm KPS Capital Partners. The transaction places a valuation of €2.4 billion on the packaging unit, including debt, and prompted a gain of more than 16% in the company’s shares.
Under the terms announced, the packaging business will continue to operate independently under the MM Packaging name, with MM Group maintaining a 30% ownership position. The move is framed by the company as a step to sharpen its corporate focus on its cartonboard and paper operations.
MM Group estimates cash proceeds from the deal in a range between €1.8 billion and €1.9 billion. Management has outlined intended uses for the funds that are limited to debt repayment, pursuing strategic options, and returning capital to shareholders, including a planned distribution of €500 million to €600 million.
The agreement contains a conditional clause tied to future performance: if specified earnings targets in 2027 are not achieved, MM Group’s stake could be reduced further to 20% with no additional consideration payable to MM Group. The company has described the sale as subject to the usual regulatory and other approvals.
Operationally, MM Packaging runs more than 50 production sites across 19 countries and employs around 8,500 people. The business manufactures consumer-facing packaging products such as folding cartons, labels and leaflets, serving end markets that include food and beverage, pharmaceutical and healthcare, beauty and personal care, and household care.
The transaction has received approval from MM Group’s supervisory board. Closing of the deal is anticipated in the first half of 2027, subject to regulatory clearances and other customary conditions. For the group’s operations in France, the completion of the acquisition is additionally contingent on consultation processes with workers’ representatives.
Contextual notes
- The transaction value of €2.4 billion includes debt.
- MM Group will remain a minority holder with 30% ownership of MM Packaging after closing.
- Potential reduction of MM Group’s interest to 20% depends on meeting earnings targets in 2027, with no further payments if those targets are missed.