Greif to Sell Containerboard Business, Boost Debt-Reduction Efforts

Core Insights - Greif, Inc. has entered into a definitive agreement with Packaging Corporation of America to divest its Containerboard business, which includes its CorrChoice sheet feeder network, aimed at debt reduction and unlocking value-creation opportunities [1][3][7] Group 1: Business Overview - Greif's containerboard business consists of two mills with a production capacity of 800,000 tons and includes eight sheet feeder and corrugated plants across the U.S. [2][7] - The containerboard business generated revenues of $1.2 billion and EBITDA of $212 million for the fiscal year ending April 30, 2025 [2][7] Group 2: Strategic Implications - The divestiture aligns with Greif's Build to Last strategy, enhancing portfolio optimization, capital efficiency, and growth acceleration [3][7] - The transaction is expected to close by the end of fiscal 2025, pending regulatory approvals, with Packaging Corp paying Greif $1.8 billion in cash [4][7] Group 3: Financial Performance - In Q2 of fiscal 2025, Greif reported adjusted earnings per share of $1.19, surpassing the Zacks Consensus Estimate of $1.08, reflecting a year-over-year improvement of 43.4% [5] - Revenues for the same quarter increased by 1.1% year over year to $1.39 billion, although it fell short of the Zacks Consensus Estimate of $1.43 billion [5] Group 4: Stock Performance - Greif's stock has appreciated by 26.4% over the past year, contrasting with a 3.2% decline in the industry [6]