MM Group Sells Majority Stake in Packaging Business in €2.4 Billion Deal with KPS

European packaging group MM Group has agreed to sell a majority stake in its Packaging business to U.S. private equity firm KPS Capital Partners in a transaction valuing the business at an enterprise value of €2.4 billion. The deal will separate the group's packaging operations from its Board & Paper business, allowing both divisions to pursue independent strategies and investment priorities.

Under the agreement, KPS will hold a 70% stake in a newly established holding company, while MM Group will retain 30% ownership and continue participating in the business's future development. The transaction covers MM Group's Food & Premium Packaging and Pharma & Healthcare Packaging operations, excluding its businesses in Iran and Tunisia. Following completion, the packaging division will retain the MM Packaging name and operate as a standalone company, with opportunities for organic expansion and selective acquisitions.

MM Group expects to receive approximately €1.8 billion to €1.9 billion in net cash proceeds after accounting for its planned investment of around €400 million in the new holding company. The proceeds are intended for debt repayment, strategic investments and shareholder distributions. The company is also planning a special distribution of €500 million to €600 million, subject to corporate approvals, regulatory requirements and business conditions. Following the transaction, MM Group expects to hold net cash of approximately €800 million to €900 million.

The restructuring will leave MM Group focused on its Board & Paper operations, including cartonboard, recycled cartonboard, kraft paper and other paper products. A long-term cartonboard supply agreement will maintain material supplies from this division to the separated packaging business, preserving an important commercial connection between the two companies. Operations will continue as normal before completion, which is expected in the first half of 2027, subject to regulatory approvals and other closing conditions.

The transaction reflects a broader restructuring of the European packaging sector, where companies are adjusting their business portfolios and capital allocation to focus on specific markets. For the recycling industry, MM Group's continued emphasis on Board & Paper is particularly relevant given the role of recycled cartonboard and recovered paper in fibre-based packaging production. However, the deal itself does not represent a new recycling capacity investment; its longer-term significance will depend on how the two businesses develop their production and sourcing strategies after separation.

Source: MM Group

SUNSHINE Spotlight: The separation places MM Group's paperboard operations at the centre of its future business strategy, keeping recovered fibre and recycled cartonboard relevant to its packaging supply chain. Developments in the European paper packaging sector will remain important to recovered paper suppliers and recyclers as manufacturers adjust their production structures and material sourcing priorities.