Chesapeake Services and Multi Packaging Solutions (MPS) signed an agreement for merging the two businesses, to provide print-based specialty packaging.

On a pro forma basis, the combined business will have sales of around $1.4bn with about 50 manufacturing facilities on three continents, while employing more than 7,000 people globally.

The combined company will provide a range of packaging such as printed folded cartons, labels, inserts or leaflets and rigid boxes.

In addition, the company will also offer special packaging for the pharmaceutical and healthcare, consumer, personal care, confectionery, spirits and multimedia end-markets.

According to Chesapeake, the new company will have a growing presence in emerging markets such as China, with most operations holding in the US and nine countries in Europe.

Multi Packaging Solutions CEO Marc Shore said merging the companies will benefit customers and employees.

"The combined manufacturing footprint and technological capabilities are truly unique and will position us to match our customers’ needs with a broader range of products and operational flexibility," Shore added.

Chesapeake Services CEO Mike Cheetham said: "Both companies have benefitted from a strong ongoing investment programme and will continue to invest in order to deliver on the considerable growth opportunity this merger presents."

The deal, which is expected to be completed in the first quarter of 2014, is subject to customary closing conditions, including regulatory approval. Upon completion of the merger, ownership of the combined company will be split uniformly.

Ownership will be divided between funds managed by global alternative asset manager The Carlyle Group and Chesapeake management, with investment funds advised by Madison Dearborn Partners and MPS management.

Chesapeake management currently collectively owns 100% of Chesapeake, while MPS management owns 100% of MPS.