Graphic Packaging has completed combining its existing businesses with International Paper‘s North America Consumer Packaging unit to establish a new $6bn paper-based packaging company.

Last October, the two companies entered a partnership to create the combined company.

As part of the integration, Graphic Packaging will be the sole manager of the partnership with a 79.5% stake in the new packaging firm, while the remaining 20.5% shares will be held by International Paper.

“The combination meaningfully increases our exposure to the growing foodservice market, provides significant runway to realise synergies, and will drive strong financial results.”

Owing to the transaction, Graphic Packaging has assumed $660m of International Paper debt, and has simultaneously amended and restated its senior secured credit agreement.

Graphic Packaging president and CEO Michael Doss said: “We are very enthusiastic about the platform for future growth created by this combination and expect the transaction will significantly increase our mill production and converting scale.

“The combination meaningfully increases our exposure to the growing foodservice market, provides significant runway to realise synergies, and will drive strong financial results.”

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International Paper has a two-year lock-up on the monetisation of their partnership interest and cannot buy shares of Graphic Packaging for a period of five years, subject to certain exceptions.

It is reported that the current transaction will not affect Graphic Packaging’s current board of directors and its leadership team.

International Paper’s North America Consumer Packaging business is currently valued at approximately $1.8bn.

The business is focused on manufacturing solid bleached sulphate (SBS) paperboard and paper-based foodservice products for the global market.

With the establishment of the combined company, International Paper is required to transfer its approximately 3,900 employees, two coated paperboard mills and three converting facilities in the US, in addition to one converting facility in the UK.

Graphic Packaging is a manufacturer of folding cartons and paper-based foodservice products in the US.