The fourth biggest producer of corrugated shipping boxes in the United States, Packaging Corp of America, had entered into an agreement to purchase Boise Inc. The said purchase was pegged at USD1.27 billion in cash and would serve to expand the production capacity of the company in the Pacific Northwest and in Europe.
Packaging Corp would pay out USD12.55 per Boise share according to a joint statement from the two firms. The price adds on a 26% premium to the Boise share value at close of markets last Sept.13. Also included in the purchase is the acquisition of USD714 million worth of debt contracted by Boise. The said transaction is expected to be completed by the end of the 2013 fourth quarter.
According to Packaging Corp of America Chairman Paul Stecko, "This acquisition is an excellent fit both operationally and strategically, with unique and substantial synergies. It also provide the container board that PCA needs to support our long-term corrugated products growth."
The takeover would increase Packaging Corp of America's corrugated board production by 42% to a total of 3.7 million tons per year. WIth the increased production, the company is projecting pretax savings of USD105 million within three years of the completion through decrease of transportation costs and other matters.
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