MM Group sells 70% of its packaging arm to KPS at a EUR 2.4bn valuation
The Vienna-listed cartonboard and packaging group is splitting itself in two. KPS takes control of the folding carton and pharma packaging business, while MM Group keeps its Board & Paper mills and a minority stake.
Mayr-Melnhof Karton AG, known as MM Group, has signed a binding agreement to sell its packaging business to a new holding company controlled by US private equity firm KPS Capital Partners, the company announced on Monday evening, 9 November 2026. The deal values the business at an enterprise value of EUR 2.4 billion. KPS will own 70% of the holding company and MM Group will keep 30%.
Reuters and Der Standard reported the agreement the same night. MM Group says it expects cash proceeds of about EUR 1.8 billion to EUR 1.9 billion at completion and plans a special distribution of EUR 0.5 billion to EUR 0.6 billion to shareholders once the deal closes, which is expected in the first half of 2027.
What is being sold
The perimeter covers MM Group's Food & Premium Packaging operations, excluding its businesses in Iran and Tunisia, and its Pharma & Healthcare Packaging operations. According to KPS, MM Packaging is headquartered in Vienna, runs more than 50 production sites in 19 countries and employs about 8,500 people. It makes folding cartons, labels and leaflets for food and beverage, pharmaceutical and healthcare, beauty and household care customers. KPS describes it as the world's largest producer of secondary pharmaceutical packaging and a leading producer of folding cartons for food in Europe.
After closing, MM Packaging will operate as a standalone company and keep its name. A long-term supply agreement will ensure that MM Group's cartonboard mills keep supplying the packaging business.
The deal terms
MM Group says the EUR 2.4 billion enterprise value corresponds to roughly 9 times expected 2026 adjusted EBITDA. Net of an estimated EUR 0.4 billion that MM Group will invest for its 30% stake in the new holding company, the group expects cash proceeds of about EUR 1.8 billion to EUR 1.9 billion. The final figure depends on taxes, purchase price adjustments and the timing of completion, according to the ad hoc release.
The structure includes an earn-down. If certain EBITDA targets for the 2027 financial year are not met, MM Group's stake can fall to a minimum of 20%, with no additional consideration paid by either side. Completion requires corporate and regulatory approvals and, for the French business, consultation with workers' representatives. MM Group's Supervisory Board has approved the transaction.
J.P. Morgan is sole financial adviser to MM Group, with Binder Grösswang and Linklaters as legal counsel. KPS is advised by Paul, Weiss, Rifkind, Wharton & Garrison and Schönherr on the legal side, and by Barclays Bank Ireland and Citi as financial advisers.
What MM Group does with the money
Once the deal closes, MM Group expects to hold net cash of about EUR 0.8 billion to EUR 0.9 billion. It intends to use the proceeds to repay debt, pursue strategic opportunities and make distributions to shareholders, including the planned special distribution of EUR 0.5 billion to EUR 0.6 billion, subject to corporate approvals and market conditions.
"As the European leader in folding cartonboard, our Board & Paper business will become an independent supplier to the packaging industry," said Peter Oswald, CEO of MM Group. "Following the transaction, MM Group will have a strong balance sheet and the financial resources to develop its business organically and through selected acquisitions and partnerships."
Reuters noted that MM Group's shares had fallen about 28% this year before the announcement. The company is holding a webcast for analysts and investors on 10 November at 10:00 CET.
Who KPS is
KPS manages the KPS Special Situations Funds, with about USD 19.1 billion of assets under management as of 30 June 2026. It makes controlling investments in manufacturing and industrial companies; its portfolio companies generate about USD 26.1 billion in annual revenue across 277 manufacturing facilities in 25 countries. "KPS has had extraordinary success investing in the packaging sector across paper, board and metal substrates," said Michael Psaros, co-founder and co-managing partner of KPS.
What it means for European founders and investors
The deal is a large example of a trend that has run through European markets this autumn: listed groups separating businesses with different capital needs and selling control of one side to private equity. Recent examples on this site include Stora Enso's forest demerger and PAI Partners' purchase of Elemis from L'Occitane.
For packaging and supply chain startups, a standalone MM Packaging owned by a buyout fund with a stated focus on organic growth and selective acquisitions is worth watching. KPS has said it will draw on its manufacturing experience to drive growth, and MM Group says the business is expected to pursue add-on deals. That could mean more appetite for technology that improves factory efficiency, traceability and recyclable fibre-based formats, which MM Group puts at the centre of its strategy. It also means one of Europe's largest folding carton makers will report far less publicly once it leaves the listed group.
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