Packaging Market Update – June 2025

Packaging Market Participants Navigate Tariff Woes While Advancing Consolidation Strategies

The Packaging market has remained resilient and active, even as companies navigate tariff pressures and ongoing supply chain disruptions. Through year to date (YTD), packaging merger and acquisition (M&A) activity has defied the boarder market slowdown in deal activity by continuing to steadily rise. This climb has been underpinned by strategic consolidations and bolt-on M&A as sector participants continue to seek operational efficiencies and upgrade to integrated automation systems. M&A has become a critical tool for growth across the Packaging market as players streamline operations and build scale in response to rising costs and trade uncertainty. Capstone anticipates that the sector’s upward momentum, combined with strong public company performance and investor interest, may signal continued dealmaking ahead.

While the major economic indicators signal resilience in the U.S. economy and labor market, destocking trends and volume declines in the packaging market are prevalent, especially in product categories and packaging applications most impacted by the U.S. tariff policy. Despite this softness, M&A activity in the packaging sector remains strong, lifted by multiple megadeals among industry leaders and continued private equity activity. We expect that strength to remain as we head towards 2026, especially with the potential for tariff policy resolution and interest rate cuts.

Mike SchumacherManaging Director, Capstone Partners

Financial Performance, Demand for Sustainable Packaging Helps Public Players Shrug Off Tariff Woes

Sector players have monitored tariff exposure as global trade tensions persist, reinforcing supply chains, pricing strategies, and geographic footprints to protect margins and maintain competitiveness. A geographically diverse manufacturing and supply chain network has limited U.K.-based Mondi’s (LSE:MNDI) tariff exposure to less than 3% of its export sales, according to a proxy statement.¹ Crown Holdings (NYSE:CCK) expects only $10-$30 million of tariff-based income exposure as the company generates 62% of sales from domestic production in the Americas and 38% of sales from foreign production, according to its Q1 2025 earnings presentation.² Sector participants with a multinational manufacturing footprint and tariff pass through provisions for imported raw materials have been able to mitigate impending tariff exposure. Packagers that have invested in these protectionist strategies remain well positioned for growth, with long-term commitments to new manufacturing facilities and sustainable technologies reshaping the market.

Strong performance in Q1 amid robust demand for beverage cans has reinforced public strategics’ optimistic outlook for the remainder of 2025. Of note, Crown highlighted that its 12-month trailing adjusted EBITDA exceeded $2 billion for the first time in its history, reflecting the company’s strong financial position underpinning its optimistic outlook, according to its Q1 2025 earnings call transcript.³ Improved performance has been driven by shifting consumer preferences towards products with sustainable packaging that boast higher margins for sector participants. Crown highlighted these shifting preferences as the basis for recent market share gains within its sustainable Food & Beverage Can division, representing approximately 80% of its new beverage product introductions in Q1 2025. Similarly, Mondi recently attributed higher Q1 2025 sales volumes and an 11.1% jump in EBITDA quarter-over-quarter to increased demand for sustainable packaging products, according to a May trading update.⁴ The two companies have remained cautious about potential second-order impacts on trade flows, consumer confidence, and supply chains due to heightened global trade tensions. However, investments in geographic diversity and robust supply chain networks have insulated much of this exposure and protected many public strategics’ growth outlook.

Divestitures, Rising Private Equity Underpin Packaging Market M&A Gains

Sector players have increasingly turned to M&A as a strategic lever for growth, portfolio refinement, and a quick avenue to improve operational synergies. Through YTD 2025, the sector has recorded 79 transactions announced or completed, up 6.8% year-over-year (YOY), defying the broader market slowdown in deal activity. Recent deal activity reflects a broader trend of consolidation that has actively reshaped competition and market dynamics across the sector. Private strategics have increasingly utilized this strategy to date, comprising the largest share (43%, 34 deals) of sector transaction activity for the first time since 2018. Financial buyer activity has demonstrated similar strength in YTD 2025, notching 14.7% YOY volume growth. Notably, sponsor-backed transactions rose 62.5% YOY, from eight deals in YTD 2024 to 13 in YTD 2025. These buyers have prioritized consolidating fragmented players in an effort to build scalable portfolios with advanced capabilities, capitalizing on the sector’s long-term growth tailwinds.

Sector consolidators have increasingly pursued opportunities with strong operational efficiencies and automation capabilities that serve a variety of end market and substrate customers. Notably, Granite Equity Partners-backed Massman Companies recently expanded its primary and secondary packaging lines to include cartoning and automation capabilities, via the acquisition of ADCO Manufacturing (March, undisclosed). Massman will now offer the broadest product lines of tray formers, end load cartoners, top load cartoners, sleevers, shrink wrappers, bundlers, case packers, bottle handling equipment, fillers, and palletizers in the sector. Similarly, foodservice distributor and portfolio company of Wynnchurch Capital, Handgards, acquired Inno-Pak in an effort to expand its innovative and sustainable packaging solutions (February, undisclosed). The deal has opened new avenues for market expansion and growth, with potential to enhance sourcing and converting capabilities through additional opportunistic rollup opportunities. Bolt-on M&A will likely continue as sector players seek scale, efficiency, and expanded product capabilities. This momentum could accelerate further if additional interest rate cuts materialize, reinvigorating private equity buyers as deal economics improve.

Private equity firms have been increasingly drawn to the Packaging sector, attracted to its stable end-market demand, recurring revenue models, and ample whitespace for consolidation, particularly in Contract Manufacturing and Specialty Labeling, where customization and automation capabilities drive value. To date, platform investments have seen the greatest rise in M&A activity across the sector, up 85.7% YOY following interest rate cuts in late 2024. Of note, Nonantum Capital Partners and Crestview Advisors recently closed on the acquisitions of MSI Express (March, Undisclosed) and Smyth Companies (March, Undisclosed), respectively. MSI provides contract packaging manufacturing services for food and beverage brands while Smyth provides customized packaging solutions for a diverse array of high-value consumer products. By establishing these growth platforms in the Contract Manufacturing and Specialty Labeling spaces, both financial buyers have well positioned investments to scale growth across the high-demand Consumer Products vertical. Private equity M&A interest in the sector will likely continue growing as sponsor-backed buyers and newly formed platforms continue exploring avenues to unload elevated dry powder levels, capitalize on lower borrowing costs, and carve out pieces of the fragmented Packaging market.

While financial and private strategic buyers have focused on expanding operations through bolt-on M&A, public buyers have pulled back dealmaking activity as they instead focus on pruning assets and refocusing resources towards scalable, high-margin, high-growth operations. Public strategic deal volume across the Packaging sector has fallen 50% YOY, down from 12 deals to six in YTD 2025. Notably, Ball (NYSE:BALL) divested its Aluminum Cups business by reducing its equity stake through the formation of a joint venture (JV) with Anya.AI, an industrial technology advisory and implementation firm (March, undisclosed). After underperforming—reporting a $40 million drag on annual earnings—Ball facilitated the minority stake JV divestiture of the segment to double down on its core beverage operations and now anticipates a $25 million YOY post-close improvement to revenue in 2025, according to a March Packaging Dive article.⁵

Public players in the Packaging market, such as International Paper (NYSE:IP), Smurfit WestRock (NYSE:SW), and O-I Glass (NYSE:OI), have selectively closed manufacturing facilities primarily due to a combination of production overcapacity, softening demand, and strategic consolidation efforts. IP, for instance, announced the closure of facilities including containerboard mills, box plants, a sheet feeder facility, and a recycling plant across several states in 2025. The closures come as part of its strategy to streamline operations, balance supply with demand, and make targeted investments along the Texas-Mexico border. Similarly, Smurfit WestRock has announced the closure of a corrugated products plant in Oregon. Smurfit Westrock has signaled additional forthcoming shutdowns at mills in Minnesota and Texas and has instigated initial talks to shutter two converting facilities in Germany, according to an April Packaging Dive article.⁶ The company continues to navigate its merger (September 2023, $21 billion, 1.0x EV/Revenue, 6.3x EV/EBITDA), which has created redundancies and necessitated asset rationalization to optimize its footprint. O-I Glass has started closing facilities in response to declining demand for glass containers, particularly in the Wine, Beer, and Ready-to-Drink (RTD) segments, as consumers increasingly prefer alternative packaging materials like cans and plastics. The company is also undergoing a strategic review, known as its Fit to Win initiative, to reduce redundant capacity and optimize its manufacturing network. Capstone anticipates that these divestitures will help public strategics address overcapacity, softening demand, changing market dynamics, and sustainability requirements thus improving profitability and sustainable operations for the long-term.

Mega Deals Reshape the Packaging Market Amid Consolidation and Cost Pressures

The Packaging market has seen a surge in mega deals propelled by a combination of scale-driven cost synergy maneuvers, pressure to streamline supply chains, and efforts to meet growing demand for sustainable and specialty packaging solutions. As larger players seek to gain competitive advantages through vertical integration and geographic expansion, private equity firms and select strategic buyers have pursued billion-dollar deals. In 2024, disclosed deal values totaled $51.0 billion, an 84.1% YOY increase. The increase was uplifted by Amcor’s (NYSE:AMCR) November 2024 acquisition of Berry Global (NYSE:BERY) ($16.9 billion, 1.4x EV/Revenue, 7.9x EV/EBITDA). Amcor rationalized the deal as a major step forward towards its goal to lead the Consumer and Healthcare Packaging segments. IP’s acquisition of DS Smith in March 2024 ($9.9 billion, 1.1x EV/Revenue, 7.2x EV/EBITDA) and the earlier Smurfit Kappa–WestRock merger have affirmed sector participants’ faith in the success of large-scale mergers. These mega deals have also created new scale benchmarks, evidenced by Amcor-Berry boasting a combined $24 billion in annual revenue post-merger—far surpassing its competitors Sonoco (NYSE:SON) ($5.7 billion) and AptarGroup (NYSE:ATR) ($3.6 billion), according to a press release.⁷ This type of scale enhances buying power, strengthens innovation pipelines, and broadens product offering advantages that intensify competitive pressure on small- and mid-sized players. These high-profile deals have marked a shift away from fragmented, regional operations toward a more consolidated global industry, a trend that will likely continue developing for the foreseeable future. Several additional notable transformational Packaging market transactions are highlighted below.

• TOPPAN Holdings Acquires Thermoformed and Flexibles Packaging Business of Sonoco Products (December 2024, $1.8 Billion) – Japan-based TOPPAN Holdings (TSE:7911) acquired Sonoco’s Thermoformed & Flexible Packaging (TFP) business for an enterprise value of $1.8 billion, valuing the TFP business at approximately 1.4x EV/Revenue and 8.7x EV/EBITDA (December 2024). TFP provides thermoformed and flexible packaging to diverse industries such as Food, Healthcare, and Retail. The acquisition complemented TOPPAN’s business bringing in a strong sales network, customer relationships, and packaging innovation across the Americas.

“We are extremely pleased to have the opportunity to bring Sonoco’s TFP business to the TOPPAN Group. 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,” said Hideharu Maro, Representative Director, President, and CEO of TOPPAN, in a deal press release.⁸

• Novolex Holdings Acquires Pactiv Evergreen (December 2024, $7.0 Billion, 1.3x EV/Revenue, 6.1x EV/EBITDA) – In December 2024, Apollo Global Management (NYSE:APO)-backed Novolex acquired Pactiv Evergreen (Nasdaq:PTVE) for an enterprise value of $7.0 billion, equivalent to 1.3x EV/Revenue and 6.1x EV/EBITDA. Following the deal, Pactiv Evergreen’s stock has been delisted from the Nasdaq at $18 per share, a 49% premium to its two-month unaffected volume weighted average trading price as of December 2, 2024, according to a press release.⁹ The North Carolina-based entity will now operates under the Novolex name with manufacturing and distribution footprints across the U.S., Canada, Mexico, and Europe, offering 250 brands and 39,000 combined stock-keeping units (SKU). “Together, we’ll continue to solidify our position and deliver in the markets we serve by optimizing operations, accelerating product innovation and driving commercial excellence while maintaining sustainable growth across the business,” said Stan Bikulege, Chairman and CEO of Novolex, in the deal press release.

The steady cadence of inflationary cost pressure, customer sustainability demands, and operational complexity has continued to push packaging companies toward acquiring scale and specialization. The sector has remained highly acquisitive, with mega deals north of $1 billion in enterprise value further signaling a strategic conviction for the top end of the market. Packagers have fared well despite tariff volatility, leveraging global footprints and pricing power to preserve margins. In a space where customer retention hinges on both cost efficiency and innovation, Capstone anticipates buyers to continue to pursue targets that deliver proprietary process capabilities and margin-accretive scale.

To discuss increased consolidation activity by packaging buyers, provide an update on your business, or learn about Capstone’s wide range of advisory services and Packaging market knowledge, please contact us.

Neve Adler, Analyst, was the lead Market Intelligence contributor to this article.

Endnotes

1. Mondi PLC, “Script for the Annual General Meeting held on Thursday 8 May 2025 at 10:30 UK time at Mercedes-Benz World, Brooklands Drive, Weybridge, KT13 0SL, United Kingdom,” https://www.mondigroup.com/globalassets/mondigroup.com/investors/shareholder-information/shareholder-meetings/2025/website-version-of-final-agm-script.pdf, accessed May 16, 2025.

2. Crown, “Annual Shareholders Meeting,” https://crowncork.gcs-web.com/static-files/d9bbd03d-803b-46a1-b7d1-ddf9e2373b7d, accessed May 16, 2025.

3. Seeking Alpha, “Crown Holdings, Inc. (CCK) Q1 2025 Earnings Call Transcript,” https://seekingalpha.com/article/4779251-crown-holdings-inc-cck-q1-2025-earnings-call-transcript, accessed May 16, 2025.

4. Mondi PLC, “Script for the Annual General Meeting held on Thursday 8 May 2025 at 10:30 UK time at Mercedes-Benz World, Brooklands Drive, Weybridge, KT13 0SL, United Kingdom,” https://www.mondigroup.com/globalassets/mondigroup.com/investors/shareholder-information/shareholder-meetings/2025/website-version-of-final-agm-script.pdf, accessed May 16, 2025.

5. Packaging Dive, “Ball sells majority stake in aluminum cups business, forming joint venture,” https://www.packagingdive.com/news/ball-joint-venture-aluminum-cups-ayna-ai/743278/, accessed May 16, 2025.

6. Packaging Dive, “Smurfit Westrock, GPI, Hood Container announced facility closures in April,” https://www.packagingdive.com/news/april-packaging-manufacturing-closures-layoffs-warn-case-paper-oi-glass/747009/, accessed May 16, 2025.

7. Amcor, “Amcor and Berry to combine in all-stock transaction creating a global leader in consumer, healthcare packaging solutions,” https://www.amcor.com/media/news/amcor-and-berry-to-combine-in-an-all-stock-transaction, accessed May 16, 2025.

8. TOPPAN, “TOPPAN Holdings Acquires Sonoco’s TFP Business,” https://www.holdings.toppan.com/en/news/2024/12/newsrelease241219_1.html, accessed May 16, 2025.

9. Novolex, “Novolex and Pactiv Evergreen Inc. Complete Combination, Creating a Leading Manufacturer in Food, Beverage and Specialty Packaging,” https://novolex.com/blog/novolex-and-pactiv-evergreen-inc-complete-combination-creating-a-leading-manufacturer-in-food-beverage-and-specialty-packaging/, accessed May 16, 2025.