Atlanta, Georgia Caraustar Industries Inc. has entered into a definitive agreement to acquire Tenneco Packaging Inc.'s folding carton business. Tenneco's business consists of five folding carton plants located in Mentor, Ohio; Grand Rapids, Michigan; St. Louis, Missouri; Denver, Colorado; and Salt Lake City, Utah; along with five strategically located sales and technical support centers. The completion of the transaction is subject to various conditions, including the expiration or early termination of the waiting period under the Hart-Scott-Rodino Act. Closing was expected to have been finalized in late May.

The Tenneco folding carton business had sales of $106.1 million in 1998 and consumed approximately 64,000 tons of paperboard, of which approximately 37,000 tons was recycled paperboard. With the addition of Tenneco's folding carton business, Caraustar's 1998 sales of cartons and custom packaging would reportedly have been $284.3 million, with a folding carton market share of approximately 4.7%.

In a related news story, Tenneco has completed the sale of its containerboard business to Madison Dearborn Partners for $2.2 billion. Tenneco received $2 billion in cash and retains a 45% equity ownership in the business valued at $200 million.

The new company is called Packaging Corporation of America (PCA) and is based in Lake Forest, Illinois. Paul T. Stecko, PCA's chairman and CEO, formerly served as president and COO of Tenneco.