Packaging Market Leveraged for Sustainability and Material Transformation
Capstone’s latest Packaging M&A Update reports that the Packaging market has continued to adapt to evolving regulations and adopt environmentally-sustainable solutions as sector players have sought portfolio optimization, fueling transaction activity in the space. Strategic buyers have maintained their activity in the sector as heightened consolidation has materialized. Mergers and acquisitions (M&A) have remained a strategic focal point for private businesses in the Packaging sector through year-to-date (YTD) 2025, driven by evolving market demands and the need for operational specialization.
Sustainability and regulatory pressures have been central to portfolio realignment rationale, with companies prioritizing eco-friendly solutions. Washington state, for example, introduced a 15% post-consumer recycled (PCR) content requirement for household cleaners and personal care product packaging in May 2021, according to an article from OPIS. Additional states, such as California, New Jersey, Maine, and Connecticut, have passed laws establishing minimum PCR content in various packaging products, with phased increases planned over the coming years. The European Union’s (EU) Packaging and Packaging Waste Regulation (PPWR) and directives like the EU Taxonomy and Green Claims Directive have compelled firms to adopt recyclable, compostable, or reusable materials. Notably, Procter & Gamble (NYSE:PG) reported 17% of the plastic used in its packaging (equivalent to 116,000 metric tons) came from recycled sources in fiscal year 2024, up from 14% in the prior year, according to the OPIS article. In pursuit of an alternative strategy, SIG Group (SWX:SIGN) has focused on increasing paper content in aseptic cartons to align with recycling infrastructure in regions dominated by paper streams. In July 2025, SIG formed a strategic alliance with PulPac to advance the large-scale production of paper-based closures using dry molded fiber. Mandates for recycled content in packaging regulations across the U.S. and EU have prompted companies to adopt eco-friendly materials and practices, aligning with rising sustainability expectations and global regulatory demand.
Packaging M&A activity has ticked higher year-over-year (YOY) through YTD, as supply chain strategies and substrate specialization reshape portfolios. Public strategic buyers have decreased their activity in Packaging sector M&A. This decline reflects a broader trend of asset rationalization and operational refocusing among public players. Private strategic buyers, on the other hand, have swelled in 2025, comprising the majority share (51%) of sector transaction activity. The uptick reflects a growing appetite for bolt-on acquisitions aimed at enhancing operational efficiencies and expanding product capabilities. This momentum is expected to continue as private strategics capitalize on favorable borrowing conditions, sector fragmentation, and public buyer hesitance.
Also included in this report:
A detailed breakdown of Packaging market substrates that have received heightened attention and M&A transactions that have unfolded in each.
What economic conditions have influenced M&A strategies, as firms seek to balance cost pressures with sustainability goals.
An analysis of how PE activity has faired in 2025 and what the potential for additional rate cuts means for the deployment of elevated levels of dry powder.
Capstone Partners’ Industrials Investment Banking Team provides M&A, capital formation, and financial advisory services to the owners of middle market businesses in the industrial and manufacturing industries. Our team partners with leading mid-to-large sized industrials and manufacturing businesses that serve growing end-markets. We ultimately look to work with companies that manufacture highly engineered products and differentiated services with an entrenched competitive position.
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