Sonoco selling thermoformed, flexible packaging business to Toppan for $1.8B

Packaging producer Sonoco Products Co., Hartsville, South Carolina, says it has entered into an agreement to sell its thermoformed and flexibles packaging (TFP) business to Tokyo-based Toppan Holdings Inc. for approximately $1.8 billion on a cash-free and debt-free basis and subject to customary adjustments.

Sonoco says the transaction reflects the completion of a previously announced strategic review of its TFP business and is subject to customary closing conditions, including regulatory approvals, and is expected to close in the first half of 2025. Net proceeds from the transaction are expected to be used to repay existing debt.

“The decision to sell our TFP business accelerates our portfolio simplification strategy, streamlines our organizational structure and enables more focused capital investments in our remaining industrial paper and consumer packaging businesses,” says Howard Coker, Sonoco’s president and CEO. “TFP is a great business with leadership positions in its served markets. We greatly value TFP’s tenured history as part of the Sonoco family, and I am personally proud of their longstanding commitment to serve our customers with both innovative and high-quality packaging products. We will work closely with Toppan to ensure a successful transition for our employees, customers and suppliers and wish the entire team all the best in the future.”

Toppan says the acquisition is “highly complementary,” and combines TFP’s robust sales network, customer base and product development capabilities in North and South America with Toppan’s global packaging business. The company notes that Sonoco’s TFP business serves customers in the food, retail and medical industries and provides a variety of complex packaging to value-added categories such as snacks, condiments, healthcare, prepared meals, fresh products, coffee and pet food.

Toppan says that on a pro forma standalone basis, TFP had revenue of approximately $1.3 billion in 2023.

“We are extremely pleased to have the opportunity to bring Sonoco’s TFP business to the Toppan Group,” says Hideharu Maro, representative director, president and CEO of Toppan Holdings. “In order to accelerate our strategy to become a global leader in sustainable packaging solutions, we will employ the complementary strengths of both parties to drive growth, solve customers’ needs and create significant value for our shareholders. This is an essential milestone in the Toppan Group’s global strategy to scale the sustainable packaging business.”

Toppan says it has been driving the development of sustainable packaging solutions by establishing a global supply chain from film manufacturing to packaging manufacturing and optimizing cost to meet brand owners’ needs locally and globally. In addition to packaging, the Toppan Group develops solutions in fields that include printing, communications, security, décor materials, electronics and digital transformation.

Goldman Sachs & Co. LLC is acting as lead financial advisor, and Freshfields LLP is acting as legal advisor to Sonoco. The company says RBC Capital Markets LLC also is acting as its financial advisor. Houlihan Lokey is acting as lead financial advisor and Morrison & Foerster LLP is acting as legal advisor to Toppan. Mitsubishi UFJ Morgan Stanley Securities Co. Ltd. also is acting as financial advisor to Toppan.