IN Brief:
- The €2.4bn enterprise valuation covers most MM Packaging operations, including food and premium packaging.
- KPS will hold 70% of the new packaging company, with MM Group initially retaining 30%.
- Completion is expected in the first half of 2027, subject to approvals and French employee consultation.
MM Group has agreed to transfer majority ownership of its packaging business to a company controlled by US investor KPS Capital Partners in a transaction assigning the operations an enterprise value of €2.4bn. Under the binding agreement, KPS will hold 70% of a newly created holding company and the Austrian manufacturer will retain 30%. The proposed separation covers much of MM’s food, premium, pharmaceutical, and healthcare packaging activity, while leaving its Board & Paper operations under the listed group’s direct control.
The transaction encompasses the MM Food & Premium Packaging operations, excluding activities in Iran and Tunisia, together with MM Pharma & Healthcare Packaging. The resulting company is intended to continue trading as MM Packaging and operate independently once the transaction closes. MM Group expects completion in the first half of 2027, subject to regulatory and other required approvals. The French portion of the business also remains subject to the relevant employee representative consultation procedures.
Although the headline valuation is €2.4bn, it is an enterprise value rather than the amount MM Group will receive in cash. After allowing for an estimated €400m investment representing its retained 30% equity interest, the company expects cash proceeds of approximately €1.8bn to €1.9bn. The final amount will depend on tax, completion timing, and customary purchase-price adjustments. The implied valuation is around nine times forecast adjusted earnings before interest, tax, depreciation, and amortisation for 2026.
MM Group plans to use the proceeds to reduce borrowings and support strategic opportunities in its remaining operation. It is also considering a special distribution to shareholders of between €500m and €600m after completion, subject to corporate approvals, applicable law, and business conditions. The group expects net cash of approximately €800m to €900m once the transaction has closed, significantly changing its capital position as well as the organisation of its manufacturing assets.
A further condition could alter the eventual ownership percentages. If specified earnings targets for the 2027 financial year are not met, MM Group’s equity interest in the new holding company could fall from 30% to as little as 20%. Its announcement says that such a change would not trigger any further payment between the parties. The condition makes future operating performance relevant to MM’s eventual participation in the packaging business, even though control is expected to pass to KPS at completion.
The separation changes a business model that has combined cartonboard manufacture with the conversion of that material into consumer packaging. MM Board & Paper is due to remain a supplier to the packaging company under a long-term cartonboard supply agreement. That contract is intended to preserve an important input relationship after the businesses come under different controlling shareholders. It does not specify purchase volumes or pricing, and the parties have not disclosed individual mill or converting-plant adjustments. The arrangement creates a continuing commercial link rather than leaving the packaging company to replace its board supplies immediately after completion.
MM Packaging produces folding cartons and other printed packaging for food, beverages, and several non-food sectors. Carton conversion commonly links printing, creasing and die cutting, folding and gluing, with selected packs requiring functional finishes or barrier features suited to their contents. Those are existing production activities, not newly announced investments. The transfer covers operating businesses with established converting capabilities, but neither party has disclosed a plant-by-plant capital programme, capacity reductions, or employment measures. The proposed sale therefore changes ownership and capital allocation before it establishes any different manufacturing footprint.
KPS intends to support organic growth and selective acquisitions once the packaging company operates independently, drawing on its experience of industrial businesses. The buyer and seller have not identified specific acquisition targets or outlined a timetable for changing production across MM Packaging sites. Until closing, MM Group remains the owner of the packaging operation and is responsible for it within the existing group. The regulatory approvals and consultation involving employee representatives in France are therefore material steps before the proposed holding-company structure can take effect.
After completion, MM Group intends to concentrate its direct operations on board and paper while accounting for its remaining packaging shareholding as an equity investment. KPS would control an international converter serving food and beverage customers alongside pharmaceutical, healthcare, and premium consumer products. The businesses would remain linked by cartonboard supply, even as investment and ownership decisions become separate. The transaction’s immediate timetable is defined by required approvals, French employee consultation, and the expected completion in the first half of 2027; decisions about individual factories have not been announced.
