Graphic Packaging Holding Company announces today that International Paper (NYSE: IP) has notified the Company of its intent to begin the process of reducing its ownership interest in Graphic Packaging International Partners, LLC (the "Partnership"). Per the agreement between the parties, Graphic Packaging will purchase approximately 15.1 million partnership units from International Paper for $250.0 million. As a result, International Paper's ownership interest in the Partnership will decrease from approximately 21.6% to 18.3%. The purchase will be funded with a draw on Graphic Packaging's domestic revolving credit facility. At the end of 2019, the Company had availability under the domestic revolving facility in excess of $1.4 billion. International Paper has the contractual right to continue to reduce its minority ownership interest in the Partnership every 180 days with the next potential transaction date in July 2020, subject to modification by the parties.

Michael Doss added, "Our strong cash flow generation and healthy balance sheet provide us the flexibility to purchase the initial $250 million of minority interest from International Paper. The 2018 transaction with International Paper has successfully created value for our customers and stakeholders while building a leading integrated paperboard packaging platform. We appreciate the confidence International Paper placed in us to build and grow the business. The transaction significantly increased our addressable market and vertical integration opportunities, while accelerating our presence in fiber-based packaging solutions."

Settlement of Approximately $900 Million in U.S. Pension Plan Obligations

The Company is also announcing the settlement of approximately $900 million in pension obligations related to its largest U.S. pension plan. The benefit obligations will be settled through a combination of lump sum payments made in the fourth quarter of 2019 to plan participants electing such payments and the purchase of a group annuity contract to transfer the remaining pension benefit obligations to an annuity provider in the first quarter of 2020. The Company took a non-cash settlement charge of $39.2 million in the fourth quarter of 2019 related to the lump sum payments. The Company anticipates taking a non-cash settlement charge of approximately $150 million in the first quarter of 2020 related to the transfer of the liability to the annuity provider.