Business

US paperboard packaging heavyweights Graphic Packaging Corporation and Altivity Packaging are to merge.

The deal, which will create new £2.2bn ($4.4bn) firm Graphic Packaging Holding Company, is expected to completed by the end of 2007, subject to regulatory and shareholder approval.

The new firm will be headed up by Graphic Packaging Corporation president and chief executive David Scheible, while Altivity chairman George Bayly will join him on the board of directors.

The firms have identified potential savings of £44m per year by 2011 off the back of the merger. Altivity alone forecasts one-off savings of £25m in 2007 and an annual operating cost reduction of £22m by 2009.

The combined company will employ 15,600 staff and run 86 facilities worldwide, including 47 folding carton plants, 12 multi-wall and speciality bag facilities, 10 paperboard mills, six flexible packaging plants and three packaging machinery manufacturing factories.