Nippon Paper Industries Co. said Thursday it has agreed to purchase the world's third largest liquids packaging board business from U.S. timber company Weyerhaeuser Co. for $285 million.
The U.S. business, which produces and sells paper containers for soft drinks and milk, will be transferred to Nippon Paper through a wholly owned subsidiary of the Japanese firm to be set up in the United States.
The deal comes as Nippon Paper is seeking to expand its packaging operations and benefit from an expected increase in demand for paper packaging in North America at a time when Japan's paper market has been shrinking due to the use of computers and the spread of electronic media.
The acquisition of the U.S. packaging business, which boasted sales of $362 million in 2015, will be completed in the July-September quarter this year.
Weyerhaeuser, based in Washington state, has decided to sell the liquids packaging to focus on its mainstay timber business as part of its strategic business review.
Nippon Paper says it has over the years developed a strong relationship with Weyerhaeuser in the paper packaging business and in joint ventures in publishing.