American packaging company Graphic Packaging has agreed to buy European fibre-based packaging producer AR Packaging.

The transaction, worth almost $1.45bn in cash, is estimated to add $1.1bn in annual sales for Graphic Packaging and $160m in annual adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA).

The companies’ integration is also expected to result in $40m total synergies over the 36 months following the deal’s completion.

Graphic Packaging executive vice-president and chief financial officer Stephen Scherger said: “The acquisition of AR Packaging expands our opportunities to serve and grow in markets around the world with our sustainable packaging solutions.

“This combination, together with our previously announced acquisition of Americraft Carton, supports our growth goals and positions us to consistently deliver organic sales growth at the high end of our 100 to 200 basis points goal, as outlined in Vision 2025.”

AR Packaging president and CEO Harald Schulz said: “I am proud of the progress we have made in establishing a clear strategy and building AR Packaging into a respected provider of packaging solutions.

“Graphic Packaging’s shared approach to customer service and deep focus on providing innovative, sustainable solutions closely aligns with how we operate our own business, making them an ideal partner.

“Our team looks forward to joining with the Graphic Packaging team to become the premier global provider of sustainable fibre-based packaging solutions.”

Based in Sweden, AR Packaging produces fibre-based consumer packaging.

The company employs 5,500 people and operates 29 factories in 13 countries. These sites manufacture solutions such as folding cartons, trays, cups, flexible materials, system solutions, leaflets and labels.

Both companies’ boards of directors have unanimously approved the deal.

The deal is expected to be completed in the next four to six months. Completion of the deal is subject to regulatory approvals being given and customary adjustments being closed.

Last month, Graphic Packaging announced plans to acquire North American folding carton manufacturer Americraft Carton.

The deal, valued at around $280m, includes seven Americraft Carton converting facilities and all the company’s employees.