Austria's MM Group to sell majority stake in packaging business in $2.7 billion deal

Nov 9 (Reuters) - Austrian firm Mayr-Melnhof Karton said on Monday it would sell a 70% stake in its packaging business to US private equity firm KPS Capital Partners in a deal valuing the business at €2.4 billion ($2.69 billion), including debt.

The company, also known as MM Group, will focus on its cartonboard and paper business and keep a 30% stake in the packaging business, which will operate as a standalone company.

Here are more details:

• MM Group expects cash proceeds of €1.8 billion to €1.9 billion, which it will use to repay debt, pursue strategic opportunities and return €500 million to €600 million to shareholders

• Its stake in the packaging business could fall to 20% if certain 2027 earnings targets are missed, with no additional payments to the company

• The deal, approved by MM Group's supervisory board, is expected to close in the first half of 2027, subject to regulatory and other approvals

• Shares of the company are down about 28% this year

• KPS invests in manufacturing and industrial companies and had assets under management of about $19.1 billion as of June-end

($1 = 0.8926 euros)

(Reporting by Disha Mishra in Bengaluru; Editing by Leroy Leo and Sahal Muhammed)