KapStone Paper and Packaging Corp said on Monday it struck a deal to buy Longview Fibre Paper and Packaging Inc for US$1.03bn in cash, in a move to bulk up its production of containerboard used in making cardboard boxes.

KapStone Chairman and Chief Executive, Roger W Stone, said the acquisition will immediately increase the company’s earnings and generate strong cash flow. He added that the firm has high interest in expanding its Kraft paper line, including Longview Fibre’s FibreShield, a high-strength kraft paper used to make cement bags.

This spring, Longview Fibre completed a US$15m upgrade to the machine that produces FibreShield and has increased sales in growing Asian markets.

KapStone owns 15 mills nationwide with a mix of union and nonunion workers, including five box plants in the Midwest previously owned by Longview Fibre before 2007.