SYDNEY, NNA - Nippon Paper Industries Co. will acquire the local paperboard fiber-based packaging unit of Australian packaging maker Orora Ltd. to launch its integrated corrugated paperboard manufacturing business in the Oceania region.
Nippon Paper’s board of directors approved a contract to purchase the business based in Australia and New Zealand from Orora for 1.72 billion Australian dollars ($1.17 billion) on Thursday, the Japanese company said in a press release.
The Orora paperboard packaging business includes the production and processing of corrugated base paper as well as the manufacture of paper bags for carrying rice and wheat, and paper cartons for packaging consumer goods.
With the transfer of the Orora unit, expected to be completed on January 31, 2020, Nippon Paper seeks to augment the “synergetic effects” with its Australian subsidiary, Paper Australia Pty Ltd, as well as to “further build the group’s packaging business on a global scale,” the statement said.
According to the Australian Financial Review, Orora CEO Brian Lowe said he was “confident” that the deal, the latest in a string of local acquisitions by Japanese firms, would receive regulatory approval from Australia’s Foreign Investment Review Board (FIRB).
He said the majority of workers in the fiber business would be retained by the Nippon Paper subsidiary but that there would be reductions in areas such corporate services.